Drawdown Calculator

Calculate the drawdown percentage of your trading account from peak to current balance. Essential for performance tracking.

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Calculator

Peak Balance ($)

Current Balance ($)

Drawdown (%)

20.00%

Loss Amount ($)

$2,000.00

Equity Remaining ($)

$8,000.00

How It Works

Drawdown is the peak-to-trough decline in your trading account balance, expressed as a percentage. It measures the reduction from your account's highest balance to its lowest before a new high is reached.

Monitoring drawdown is crucial for risk management — it tells you how much you've lost from your peak and helps you assess whether your risk levels are appropriate.

Most professional traders set maximum drawdown limits (e.g., 20-30%) beyond which they stop trading to reassess their strategy.

The Formula

Drawdown % = ((Peak Balance − Current Balance) / Peak Balance) × 100

Peak Balance = The highest balance your account has ever reached, Current Balance = Your current account balance. The result is the percentage decline from your peak.

Example

Scenario: Your account reached a peak of $10,000 but has since declined to $8,000 due to a series of losing trades.

Calculation: Drawdown % = (($10,000 − $8,000) / $10,000) × 100 = 20%.

Result: Your account is in a 20% drawdown. You've lost $2,000 from the peak, with $8,000 equity remaining.

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Frequently Asked Questions

What is a maximum drawdown?

Maximum drawdown (MDD) is the largest peak-to-trough decline ever observed in your account. It's a key metric for evaluating the riskiness of a trading strategy.

What is an acceptable drawdown?

Most professional traders operate within 10-25% maximum drawdown. Fund managers often have strict limits of 10-15%. Larger drawdowns become increasingly difficult to recover from (a 50% loss requires 100% gain to break even).

How do I recover from a drawdown?

Reduce position sizes, temporarily lower risk, or stop trading to review your strategy. Emotional trading during drawdowns often leads to even larger losses.

Is drawdown the same as loss?

Drawdown specifically measures the decline from a peak. It's different from a simple loss because it compares your current balance to the highest point, not to your starting balance.