Use a previous high
The calculator tracks a running peak. A later value above it becomes the new peak for the next decline.
FREE TRADING TOOL · DRAWDOWN ANALYSIS
Trading Drawdown Calculator
Measure the decline from an account peak to a later trough. See the loss in money and percent, the gain needed to recover, and the result in R when you provide your risk percentage.
Calculated in your browser. Values are not sent to BTI.
CALCULATED DRAWDOWN
15.00%From 12,000 to 10,200
ABSOLUTE DECLINE1,800 account units
RECOVERY REQUIRED17.65%
APPROX. R-EQUIVALENTApprox. 15.00R
OBSERVATIONS2
Returning from 10,200 to 12,000 requires 17.65%.
Educational calculator. The approximate R-equivalent divides drawdown percentage by a constant entered risk percentage; it does not reconstruct historical R-losses when risk changed. Results do not predict future drawdown or establish a safe trading level.
READ THE ACCOUNT CURVE
Drawdown measures the path, not just the destination.
A profitable period can still contain a deep decline. Drawdown starts at a previous peak and ends at a later trough, so chronological order matters.
Look forward in time
A lower value only counts against a peak that occurred before it. Sorting the data changes the answer.
Balance or equity?
Balance follows realized results. Equity also includes unrealized P/L and can expose larger intratrade declines.
Adjust external changes
Deposits and withdrawals can look like performance. Adjust them before comparing drawdown across periods.
THE RECOVERY GAP
A loss and its recovery are not symmetrical.
After a decline, the account has a smaller base. The deeper the drawdown, the larger the percentage gain needed to return to the previous peak.
DRAWDOWN %(Peak − trough) ÷ peak × 100
RECOVERY %(Peak − trough) ÷ trough × 100
DrawdownGain to recover
−5%+5.26%
−10%+11.11%
−20%+25.00%
−30%+42.86%
−50%+100.00%
DON'T READ DRAWDOWN ALONE
Pair risk with return and trade context.
Maximum drawdown describes one historical decline. It says more when you examine the same account, period and data convention alongside other performance measures.
How did gains compare with losses?
Read total winning and losing P/L alongside the depth of the account decline.
What was the average trade result?
Check the sample size, units and costs behind the average.
How did results relate to planned risk?
Use the initial monetary risk for each trade when calculating its realized R-multiple.
BTI PULSE
Move from one drawdown number to the trades behind it.
PULSE organizes trading history around performance and review. Use the equity and drawdown view to locate the decline, then inspect the relevant accounts, setups, rules and journal entries.
Equity & drawdown
Review the account curve and its declines over time.
R · % · money
Change the unit while keeping the same performance context.
Multiple accounts
Keep separate account histories organized.
Rules & reviews
Connect the result with the trading decisions behind it.
A PRACTICAL DRAWDOWN REVIEW
Use the number to find the evidence.
- 01DEFINE
Select the account, time period, currency and balance or equity series.
- 02VERIFY
Check the order, missing observations and external cash flows.
- 03MEASURE
Find the peak, later trough, decline and recovery requirement.
- 04INVESTIGATE
Review the trades, risk and rule adherence inside the decline.
- 05DOCUMENT
Record what the data supports and revisit it with a larger sample.
FAQ
Questions about trading drawdown.
How is trading drawdown calculated?
Absolute drawdown is the decline from a previous peak to a later trough. Percentage drawdown is that decline divided by the peak and multiplied by 100.
Why is the recovery percentage larger than the drawdown percentage?
After a loss, the recovery starts from a smaller base. For example, a 20% decline from 100 to 80 requires a 25% gain on 80 to return to 100.
What is maximum drawdown?
Maximum drawdown is the largest peak-to-later-trough decline found in the selected account-value series. The order of observations matters.
What is the difference between balance and equity drawdown?
Balance drawdown follows realized account balances. Equity drawdown also includes unrealized profit and loss on open positions and can therefore reveal declines that closed-trade history misses.
Can deposits and withdrawals distort drawdown?
Yes. External cash flows can create apparent jumps or declines that do not come from trading performance. Use a cash-flow-adjusted series before comparing periods.
How do I express drawdown in R-multiples?
Enter the percentage of the account represented by 1R. The calculator divides the percentage drawdown by that risk percentage. This is only a reference when trade risk changes over time.
Does a small historical drawdown mean a strategy is safe?
No. Drawdown depends on the sample, data frequency, open-position treatment and market conditions. Historical drawdown does not set a limit on future losses.
FROM THE DECLINE TO THE DECISIONS
Calculate the drawdown.
Review what created it.
Use the free calculator for a quick measurement, then bring the trading history and journal context together in PULSE.
Explore PULSE