Drawdown Calculator

This calculator shows how your account balance decreases after a sequence of consecutive losing trades.

It calculates the total drawdown, the ending balance, and provides a step-by-step breakdown of how your account balance declines after each loss.

This tool helps you understand:

• How quickly losses compound when using the chosen risk percentage

• Why trading with a high risk % can become dangerous very fast

• How many consecutive losses your system can handle before reaching your maximum drawdown tolerance

1. Enter your starting balance.
2. Enter the number of consecutive losing trades you want to simulate.
3. Enter the percentage of balance you risk on each trade (your risk per trade).
4. Press Calculate.

The tool will display:
Your ending balance, The total drawdown %, A breakdown showing your balance after each individual loss.

Many traders mistakenly calculate drawdowns in a straight line (for example, “10 losses × 2% = 20% drawdown”). However, this is not how percentage-based risk works.

When you risk a fixed percentage of your account per trade, your risk amounts adjust based on your account balance. If the balance shrinks, the dollar amount you risk become smaller.

This slows down the rate of decline - which is why the actual drawdown is less than a simple linear estimate.

The same effect works in the opposite direction during winning streaks:

Trading with fixed risk percentage produces faster growth because your position size increases as the account grows.

This calculator helps you see these compounding effects in real numbers, so you can understand how risk % influences both drawdowns and recovery speed.

This calculator shows you how sustainable your current risk per trade % really is.

If a relatively small losing streak leads to a deep drawdown, it’s a clear sign that your risk per trade is too high, your system lacks resilience, and your account is vulnerable during volatile market periods.

By visualizing how quickly (or slowly) your equity declines under pressure, this tool helps you evaluate the strength of your risk model and adjust your risk percentage to a safer, more stable level.