Maximum Drawdown Calculator
Paste an equity series to find the largest peak-to-trough fall and the recovery factor of the run.
Quick answer: Maximum drawdown is the deepest peak-to-trough decline an equity curve suffers, measured as a percentage of the peak. The tool walks your equity series, tracks the running high-water mark, and records the largest percentage fall below it. It also reports the recovery factor, the net profit divided by the rupee size of that worst drawdown, and draws the curve with the drawdown period marked.
How to use it
Paste the value of your account or backtest equity at successive points in time, separated by commas, spaces or new lines. The output is the maximum drawdown as a percentage of the peak, the rupee depth of that drawdown, the net profit, and the recovery factor (net profit divided by the worst drawdown). The chart shows the equity curve with the peak-to-trough fall highlighted.
Formula
Max drawdown% = max over t of ( Peak so far − Equity[t] ) ÷ Peak so far × 100 ; Recovery factor = Net profit ÷ Max drawdown (₹)
Peak so far is the highest equity value seen up to and including point t. Net profit is the last value minus the first.
Limitations — what this calculator does not model
- Measures only the equity points you paste; it cannot see intra-period lows between samples, so coarse data understates the true drawdown.
- Reports depth, not duration — a shallow but long underwater period can be harder to endure than a deep, brief one.
- The worst drawdown is only the worst in your sample; a Monte Carlo re-ordering usually reveals deeper plausible falls.
- Does not model margin calls or forced liquidation that a leveraged account could hit mid-drawdown.
Frequently asked questions
Why measure drawdown from the peak, not the start?
Drawdown captures the worst experience of holding the strategy, which is the fall from the highest point reached, not from where you began. A strategy can be up overall yet still have punished you with a deep mid-course decline.
What is the recovery factor?
It is net profit divided by the maximum drawdown in rupees. A recovery factor of three means the strategy made three times its worst dip, a rough measure of reward earned per unit of pain endured.
Can a live drawdown limit drive automatic de-risking?
Yes, and this is how drawdown becomes an operational control rather than just a report. A system can cut position size or halt new entries once live drawdown crosses a threshold, requiring a partial recovery before re-engaging — the mechanism behind circuit breakers and the kill switch.
Why does drawdown matter more with leverage?
Because a deep enough drawdown can breach a margin requirement and force liquidation at the worst point, so the recovery the equity curve assumes never happens. On leveraged NSE derivatives this coupling turns a paper drawdown into a locked-in loss, which is why leverage is set against the modelled worst drawdown, not the average.
What data should I paste?
A time-ordered series of equity values, such as end-of-day account value or your live equity. The points should be in chronological order; the tool treats each value as one step after the last.
Should I track the drawdown's duration too?
Yes. Depth and duration are different, and a shallow but multi-month underwater period is often harder to run through than a deep, brief one. An ops view should show both the depth and how long the account has been below its high-water mark.
Runs entirely in your browser — no data leaves your device. Illustrative and educational only; real-world charges and market conditions apply in practice.