Measure the fall — and the climb back. Enter your portfolio's peak value and lowest point to get the drawdown percentage, the dollar damage, and the (always larger) gain needed to make it back. Add today's value to track recovery.
Answer first: maximum drawdown (MDD) is the largest percentage fall from a portfolio's peak to its subsequent low, before a new peak is reached. This maximum drawdown calculator computes the drawdown from your peak and trough, shows the loss in dollars, and answers the question investors most often get wrong: how big a gain does it take to climb back out?
Drawdown = (Trough − Peak) ÷ Peak × 100 · Recovery gain = Peak ÷ Trough − 1
Example: $50,000 falls to $35,000 → drawdown = −30%. Recovery needs 50,000 ÷ 35,000 − 1 = +42.9% — not +30%. The climb is always steeper than the fall.
Drawdown is the risk number your stomach understands. Annualized volatility is an abstraction; "my account was down 30% from its high for two years" is an experience — one that decides whether an investor stays the course or sells at the bottom. That's why professional track records are judged as much on maximum drawdown as on returns, and why the ratio of return to max drawdown (the Calmar ratio) is a standard fund metric.
Losses and gains are not symmetric, because every gain is computed on the shrunken base the loss left behind. Down 10% needs +11.1% back; down 20% needs +25%; down 30% needs +42.9%; down 50% needs +100%; down 80% needs a quadrupling. This asymmetry is the mathematical case for defense: avoiding deep holes matters more to long-run compounding than catching every rally. It's also why position sizing rules — like those in the position size calculator and Kelly criterion calculator — cap risk per trade at a small slice of capital: many small losses are recoverable; one huge one may not be.
For broad stock indexes, double-digit drawdowns aren't disasters — they're weather. U.S. large-cap stocks have historically seen intra-year drops averaging around 14%, bear markets of 20–35% every several years, a roughly −57% peak-to-trough in the 2007–09 financial crisis, and about −86% in the 1929–32 collapse. Bonds draw down too, as 2022 reminded everyone. The practical use of these numbers: size your stock exposure so that a 30–50% drawdown is survivable — financially and emotionally — because over an investing lifetime you will very likely meet one.
Enter today's value and the calculator locates you on the climb: recovery progress is how much of the peak-to-trough gap you've regained. In the example above, at $42,000 you've recovered $7,000 of the $15,000 hole — 46.7% of the way back, still needing +19% to reach the old high. Watching progress against the honest math beats the mental accounting most investors do, which quietly assumes a −30% year and a +30% year cancel out. They don't.
Reality check: this tool measures one peak-to-trough episode from the values you enter — a full equity-curve analysis finds the maximum across all peaks, and past drawdowns don't cap future ones. Educational calculator only, not financial advice. Bear-market basics from the U.S. SEC: investor.gov.
See how pros price risk in the Sharpe ratio calculator and Sortino ratio calculator, read what is a bear market? and what causes a stock market crash?, and stress-test your nerves for free in the stock market simulator.
Last updated July 2, 2026 · Written by Mustafa Bilgic. Educational only — not financial advice.
Maximum drawdown = (trough value − peak value) ÷ peak value × 100, using the deepest peak-to-trough decline before a new high is made. A portfolio that falls from $50,000 to $35,000 has a maximum drawdown of −30%.
Because the gain is measured from the smaller, post-loss base. After −30%, $50,000 becomes $35,000; getting back requires $15,000 of growth on a $35,000 base, which is 42.9%. The deeper the hole, the disproportionately bigger the climb: −50% needs +100%, −80% needs +400%.
Intra-year declines of 10–15% are routine for broad stock indexes, bear markets of 20–35% happen every few years, and historic crashes have exceeded 50% (2007–09) — the S&P 500's 1929–32 drawdown was roughly −86%. Any strategy touching stocks should be sized so its owner can survive such episodes.
Volatility measures the typical size of day-to-day wiggles in both directions; drawdown measures the worst cumulative fall from a high. Two funds can have identical volatility while one suffered a far deeper drawdown — which is usually the number investors actually feel and act on.