ARMFDeposit recovery calculator
The deposit recovery calculator shows the price of a drawdown in two dimensions: how many percent have to be won back from what is left and how long the way back will be with your statistics. The second number usually makes a bigger impression than the first.
How much it takes to win back a drawdown
The number of trades is counted by compound growth: ln(1 + required growth) ÷ ln(1 + average trade). This is an estimate assuming the statistics hold, not a forecast of the time.
How the recovery after a drawdown is calculated
The question «how much it takes to win back a drawdown» has exactly one precise answer, and it does not depend on the market: it is the arithmetic of fractions. The deposit recovery calculator counts from what is left, not from the original amount — and that is the whole asymmetry.
| Value | Formula | In the example |
|---|---|---|
| Left of the account | 1 − drawdown | 80 % |
| Required growth | hole ÷ (1 − hole) | +25.0 % |
| Average trade in R | win rate × R/R − (1 − win rate) | +0.35 R |
| Average trade in % of equity | average trade in R × risk | +0.35 % |
| Trades to recover | ln(1 + growth) ÷ ln(1 + average trade) | 64 |
The example inputs: a hole of 20 % from the peak, a limit of 1 % per trade, a target twice as far as the stop, 45 % winners. The logarithms are needed because growth is compound: every next trade is counted from the increased equity.
What happens at zero expectancy. If the win rate falls below break-even, the average trade turns negative and returning to the previous level becomes impossible — instead of a large number of trades the widget shows a dash. Negative expectancy cannot be compensated by time: the longer such a system is traded, the deeper the drawdown.
Why the chart curves upwards
The curve of required growth is non-linear: up to 20 % it almost coincides with the diagonal, after 50 % it goes up almost vertically. The reason is that the base for the growth shrinks together with the drawdown itself.
The practical meaning of this curve is the justification for the drawdown limit. A restriction of 10–20 % is set not out of caution but because within that range the recovery is still comparable with the ordinary result of the system. Beyond it the recovery turns into a separate project lasting months.
Recovery times for a forex account with different system quality
The number of trades to recover depends not on the depth of the hole but on the average result of a trade. Below is one and the same hole of 20 % with four different sets of parameters.
| Win rate and ratio | Average trade at 1 % risk | Trades to recover | At 5 trades a week |
|---|---|---|---|
| 45 % and 1 : 2 | +0.35 % | 64 | about 3 months |
| 40 % and 1 : 2 | +0.20 % | 112 | about 5 months |
| 50 % with a target of one and a half stops | +0.25 % | 89 | about 4 months |
| 35 % and 1 : 2 | +0.05 % | 446 | more than two years |
The last row explains why a thin edge is not «slow but sure». A system with an expectancy of +0.05 R is formally profitable, but climbing out of an ordinary drawdown takes it years, during which the parameters will almost certainly change. The practical conclusion: the buffer in expectancy matters more than it seems, and it is exactly what decides whether a system survives its own drawdowns.
Related calculations. The depth of a likely drawdown is shown by the losing streak calculator, and the size of the expectancy and its spread by the distance simulation. Together they answer the question of whether it makes sense to start the recovery with the same rules.
Frequently asked questions
How much has to be earned after a 50 % drawdown?
Exactly 100 % of what is left — the account has to be doubled. With an average trade of 0.35 % of equity that is about two hundred trades if the statistics hold.
Why not simply raise the risk to get out faster?
Because raising the risk proportionally raises the depth of the next losing streak as well. The expectancy of the system does not change, while the probability of falling into a deeper drawdown grows.
Does the calculation account for costs?
Indirectly: through the share of winners and the ratio taken from your journal, where the actual results of the trades already include them. Substituting planned values from a test without costs gives a more optimistic result than reality.
Why does the calculator say «never» at negative expectancy?
The average trade drags the account down, so the previous level is unreachable and the hole only deepens. A dash here is the answer, not a refusal to calculate.
How do you convert the recovery time into calendar months?
Divide the number of trades by your average frequency. At 5 trades a week, 64 trades are about three months and 199 trades about ten.
Does the deposit size affect the recovery time?
No. The calculation is in percentages, so an account of $500 and one of $50,000 recover in the same number of trades under identical rules.
What to do if the drawdown is deeper than 50 %?
Stop and review the system. Climbing out of such a hole requires doubling the account — that is hundreds of trades, over which the parameters of the system will almost certainly change.
Can the recovery be sped up with longer targets?
Only if the share of targets reached does not fall proportionally. It usually does, so the expectancy changes little while the spread of results grows.
Why is the required growth larger than the hole itself?
Because the bases differ: the loss is taken from the full account and the growth from what is left. Losing 20 % leaves 80 %, and to get back those 80 % have to add 25 %.
From which point should the hole be measured — from a deposit or from the maximum?
From the peak. Profit that was earned and given back is just as much a loss as one from the starting amount, and it is exactly what characterises the risk of the system.
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