The most important asymmetry in trading: losses and gains are not symmetrical. See what any drawdown really costs.
| Drawdown | Required gain to recover | What it means in practice |
|---|---|---|
| 5% | +5.3% | Routine — normal cost of doing business |
| 10% | +11.1% | Manageable — review your last 10 trades |
| 20% | +25% | Serious — cut size in half until process is fixed |
| 30% | +42.9% | Program-threatening — stop trading, full review |
| 50% | +100% | You must double just to break even |
| 70% | +233% | Years of elite performance required |
| 90% | +900% | Effectively a restart, not a recovery |
Recovery requirement = loss ÷ (1 − loss). The formula is convex: doubling your drawdown far more than doubles the climb back. This single equation is why professionals obsess over the size of each trade: at 1% risk per trade even a 10-loss streak digs a hole of barely 10% (+11% to recover), while at 10% risk the same streak leaves you needing +186%. The streak is the same; the sizing decides whether it's a bruise or a funeral.
It is also why "I'll win it back quickly" is the most expensive sentence in trading — the attempt to recover fast means bigger size, which means the next loss digs a disproportionately deeper hole. Drawdowns are escaped by process, patience and small, boring, repeated edges — never by one heroic trade.
Averaging down to "lower the break-even". You're increasing size precisely when your account can least afford another loss. Doubling risk after losses (martingale) — the table above is the mathematical proof of why this ends one way. Not defining a maximum drawdown in advance — decide today the number at which you stop and review (many professionals use 20%), because you will not decide rationally while inside the hole.