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Maximum Drawdown Calculator

Measure the worst peak-to-trough decline in your investment value from a series of returns. Maximum drawdown (MDD) helps you understand historical downside risk.

Calculator Inputs

Starting portfolio value before applying returns.

Comma-separated percentage returns (e.g., 5, -2.5, 3, -10).

Results

  Value
Maximum Drawdown -10.00%
Drawdown Amount -$1,000.00
Peak Value $10,500.00
Trough Value $9,450.00
Final Value $9,774.60

What is maximum drawdown?

Maximum drawdown (MDD) is the largest observed decline from a historical peak to a subsequent trough, expressed as a percentage. It quantifies downside risk by answering: how far could my portfolio have fallen before recovering?

How to calculate maximum drawdown

MDD = (Trough Value − Peak Value) ÷ Peak Value

We compute an equity curve from your percentage returns, track the running peak, and measure the worst peak-to-trough decline.

Why investors care

  • Risk tolerance: Aligns portfolios with acceptable loss levels.
  • Recovery time: Larger drawdowns require higher gains to break even.
  • Comparisons: Evaluate funds or strategies beyond average returns.

Example

Scenario: Start with $10,000 and returns of 5%, -3%, 4%, -10%, 2%, -1%, -8%, 3%.

The worst decline occurs after a new peak, dropping to a trough of about 10–20% depending on the path. The calculator identifies the exact peak and trough and the corresponding drawdown.