Break-Even Recovery Calculator

Losses Are Not Symmetrical

Lose 10 percent and you need 11.1 percent to get back to even. Lose 30 percent and you need 43 percent. Lose 50 percent and you need to double your account just to be where you started. The deeper the hole, the steeper the climb, and it gets steeper fast.

• 10 percent loss needs an 11.1 percent gain
• 20 percent loss needs a 25 percent gain
• 30 percent loss needs a 42.9 percent gain
• 50 percent loss needs a 100 percent gain
• 75 percent loss needs a 300 percent gain

This is the math behind the 1 percent rule. A 1 percent loss needs a 1.01 percent gain to recover. You can take a string of those and still be in the game. You cannot take one Danny trade.

The Danny math

Tesla, December 2024. $50,000 account, $200,000 of exposure on margin. A 5 percent pullback in the stock was a 20 percent hit to the account before the broker stepped in. Had he survived that, he would have needed a 25 percent gain to get back to even. He did not survive it. The broker sold him out and the recovery number became infinity. Read the full story in my position sizing guide.

What To Do With This Number

Use it before the loss, not after. When you are tempted to size up because a setup feels certain, run the drawdown you would take if it fails and look at the gain required to undo it. That number makes the decision for you.

If you are already in a hole, the answer is not to swing bigger. That is how a 30 percent drawdown becomes 60. Cut size, go back to 1 percent or less, and rebuild with the same sizing discipline that would have prevented the hole. Every recovery I have watched work looked boring. Every one that failed looked like revenge trading.

Also use it for the entry side. Multiple buys at different prices, plus commissions, give you one cost basis. This tool tells you the exact price you need to cover it. Know that number before you decide where the stop goes.

Frequently Asked Questions

If I lose 20 percent, how much do I need to make to break even?

25 percent. The formula is loss divided by one minus loss. 0.20 divided by 0.80 is 0.25. Losses and gains are not symmetrical, which is why protecting capital comes before everything else.

Why does a 50 percent loss need a 100 percent gain?

Because you are earning on half the base. $10,000 that drops to $5,000 has to double to get back to $10,000. Same dollars, twice the percentage.

What is the fastest way to recover from a big drawdown?

Slowly. Cut size back to 1 percent or less, trade only your best setup, and let the account rebuild. Sizing up to catch up is how traders turn a bad month into a blown account.

How does this relate to the 1 percent rule?

The 1 percent rule keeps every loss on the flat part of the curve, where recovery is almost one to one. Three losses in a row at 1 percent is a 3 percent hole. Three losses at 10 percent is a 27 percent hole that needs 37 percent to climb out of.

Related Tools

• Risk Calculator: Size so the hole never gets deep
• P&L Calculator: Exact outcome on any trade
• Trade Journal: See your drawdowns over time