Drawdown
04 • LIVENon-linear penalty curve. 50% loss → 100% gain to recover.
Recovery % = Loss% ÷ (100 − Loss%) × 100. Example: 20% loss needs 25% gain. Risk of Ruin rises exponentially with leverage.
DRAWDOWN
-25.0%
-$2,500
RECOVERY NEEDED
33.3%
+$2,500 to break even
WINS TO RECOVER
11
consecutive (at 1.5% risk, 1.8R)
RISK OF RUIN
Medium
if drawdown deepens
Recovery Penalty Curve
Non-linear: losses hurt more| Loss | Gain to Recover | Visual | Severity |
|---|
Risk of Ruin Assessment
| Metric | Value | Status |
|---|
Recovery Simulation
At 45% WR, ~18 trades expected to recover (including losses). Consecutive wins is best-case.