Maximum Drawdown Calculator
Enter peak and trough values or a sequence of balances to get the largest percentage drop.
Calculator Inputs
The maximum capital equity level achieved before depreciation began.
The lowest mark touched during the losing cycle or trade string.
Portfolio Peak-to-Trough Drawdown Diagnostics
Calculated Risk Profile
Drawdown Severity & Historical Recovery Scenarios
Mathematical sensitivity matrix modeling capital destruction against recovery return required to restore peak equity.
| Drawdown Depth | Lost Capital | Remaining Capital | Required Return | Risk Severity Classification |
|---|
What is a Drawdown?
A drawdown measures the peak-to-trough decline in portfolio equity before a new high is established, providing the definitive metric for evaluating systematic risk and volatility exposure.
The Mathematical Formula
Drawdown Amount = Peak Balance - Trough Balance
Drawdown Percentage = (Drawdown Amount ÷ Peak Balance) × 100
Worked Example
If your account reaches an all-time high of $10,000.
You then hit a losing streak and your account drops to $8,000.
Your drawdown amount is: $10,000 - $8,000 = $2,000.
Your drawdown percentage is: ($2,000 ÷ $10,000) × 100 = 20%.
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Frequently Asked Questions
Core quantitative concepts regarding drawdown mitigation and recovery velocity.
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