Risk management
How Long Does It Take to Recover From a Drawdown?
By MarketsBench · Published · 1 min read
Draft outline — the full guide is being written.
Recovering from a drawdown always requires a larger percentage gain than the loss itself, because the gain is measured from a smaller base.
The recovery math
Draft to cover: recovery gain = drawdown ÷ (1 − drawdown); table from 5% to 75% drawdowns.
Translating gains into time
Draft to cover: periods to recover = log(1 ÷ (1 − d)) ÷ log(1 + r); examples at 1%, 2%, 5% monthly returns.
Why smaller risk shortens the road back
Draft to cover: linking per-trade risk % to max drawdown depth; the asymmetry argument for 1% vs 2% risk.
Realistic expectations
Draft to cover: volatility drag; why straight-line recovery projections mislead; prop-firm drawdown limits.