Maximum Drawdown Calculator
Results are estimates based on the values you enter. Recheck your inputs and assumptions before using the output for decisions.
Calculate maximum drawdown from peak portfolio value and trough portfolio value, with recovery requirement.
Maximum Drawdown Calculator
Free online maximum drawdown calculator to measure the percentage loss from a portfolio peak to a trough, along with the recovery return needed to get back to the peak. This calculator is useful for investors, traders, fund analysts, finance students, advisers, and anyone reviewing portfolio risk. Maximum drawdown is one of the clearest downside-risk measures because it focuses on the worst drop in value from a high point to a later low point. That makes it very useful when comparing risk profiles between funds, strategies, accounts, or trading systems.
This calculator uses two simple inputs. Peak value means the highest portfolio value before the decline. Trough value means the lowest portfolio value reached after that peak. Once those values are entered, the calculator shows maximum drawdown, drawdown amount, remaining capital ratio, and recovery gain needed. These outputs are useful because a drawdown is not just about the loss percentage from the top. The recovery percentage needed afterward is often much larger, which helps explain why avoiding large drawdowns matters so much in long-term investing and trading.
The formula of maximum drawdown
Drawdown amount = Peak value – Trough value
Maximum drawdown = Drawdown amount / Peak value
Remaining capital ratio = Trough value / Peak value
Recovery gain needed = (Peak value – Trough value) / Trough value
Here peak value means the highest value before the decline, trough value means the lowest value reached after the peak, drawdown amount means the dollar loss from peak to trough, maximum drawdown means the percentage loss from the peak, remaining capital ratio means the share of capital left after the drawdown, and recovery gain needed means the percentage gain required from the trough to recover back to the old peak.
Solved Example
Example 1: Find the maximum drawdown if the peak value is $100,000 and the trough value is $65,000.
Solve: Drawdown amount = 100000 – 65000 = $35,000
Maximum drawdown = 35000 / 100000 = 0.35 = 35%
Remaining capital ratio = 65000 / 100000 = 65%
Recovery gain needed = 35000 / 65000 = 0.538462 = 53.8462%
Example 2: Find the result if the peak value is $250,000 and the trough value is $180,000.
Solve: Drawdown amount = 250000 – 180000 = $70,000
Maximum drawdown = 70000 / 250000 = 28%
Remaining capital ratio = 180000 / 250000 = 72%
Recovery gain needed = 70000 / 180000 = 38.8889%
Example 3: Find the result if the peak value is $50,000 and the trough value is $42,000.
Solve: Drawdown amount = 50000 – 42000 = $8,000
Maximum drawdown = 8000 / 50000 = 16%
Remaining capital ratio = 42000 / 50000 = 84%
Recovery gain needed = 8000 / 42000 = 19.0476%
Table of maximum drawdown calculator
| Peak Value | Trough Value | Maximum Drawdown | Recovery Gain Needed |
|---|---|---|---|
| $50,000 | $42,000 | 16.00% | 19.0476% |
| $100,000 | $65,000 | 35.00% | 53.8462% |
| $150,000 | $90,000 | 40.00% | 66.6667% |
| $250,000 | $180,000 | 28.00% | 38.8889% |
How to use this maximum drawdown calculator
Enter the peak value in the proper input field. After that, enter the trough value reached after that peak. Then click the calculate button. The calculator will show maximum drawdown, drawdown amount, remaining capital ratio, and recovery gain needed in the result box.
This calculator is useful when comparing how painful different losses really are. A 10% drawdown and a 40% drawdown are not just different in size. They also require very different recovery gains to return to the original peak. This makes drawdown analysis especially important for portfolio construction, trading strategy review, fund comparison, and risk management.
When using the result, remember that this version measures drawdown from one peak and one trough that you enter. It does not scan a full price history to search automatically for the worst sequence. Even so, it gives a clear and practical measure of downside damage and recovery burden for a known decline. This calculator is useful for investor education, portfolio review, performance analysis, and strategy risk comparison.