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Capital preservation

Drawdown & Recovery Calculator

Measure how far account equity has fallen from a prior peak — and the return required to recover from the smaller capital base.

Account values

₹

Highest comparable account value you want to measure from.

₹10.00 Lakhs

₹

Current comparable account value after the decline.

₹7.00 Lakhs

Use values on a comparable basis. Deposits or withdrawals should be accounted for before interpreting the result as trading drawdown.

Drawdown state

Below peak

Current drawdown

30.0%

A 30.0% drawdown requires a 42.86% gain on the remaining capital to return to the same peak.

Rupee drawdown
₹3,00,000
Recovery required
+42.86%
Capital remaining
70.0%
Rupees back to peak
₹3,00,000

Capital path

Current equity 70.0% of peakPeak 100%
Current value
₹7,00,000
→+42.86% required
Prior peak
₹10,00,000

The rupee amount lost and the rupee amount needed to return to the peak are the same. The percentages differ because recovery begins from a smaller base.

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VSC principle: A loss and the gain required to recover are not symmetrical. The deeper the drawdown, the harder the recovery becomes.

How the calculation works

01

Define the peak

Choose the comparable account value that represents the prior equity high you are measuring from.

02

Measure the decline

Drawdown is the percentage decline from that peak to the current account value.

03

Measure the recovery

The required gain is calculated from the smaller remaining capital base, so it rises faster than the drawdown.

Core formulas: Drawdown = (Peak − Current) ÷ Peak · Recovery = (Peak ÷ Current) − 1

How to read the result

Drawdown %
The decline from the peak value you entered to the current value, measured against the peak.
Recovery required
The gain needed on what is left to return to that peak. It is always larger than the drawdown, because it is earned on a smaller base.
The gap widens fast
A 20% drawdown needs 25% to recover; 50% needs 100%. The asymmetry is arithmetic, and it is the reason loss limits are set before a position is opened, not after.
Point-in-time, not maximum drawdown
This compares two values you supply. It does not scan an account history for the worst peak-to-trough decline, and deposits or withdrawals between the two dates will distort it.

Related reading

The framework behind it

Use with