One of the most dangerous traps in gambling and trading is not understanding the Math of Recovery. Losses work geometrically against you.
If you lose 10% of your money, you need slightly more than 11% to get it back. But as losses get deeper, the required win rate skyrockets. This calculator visualizes the “Recovery Trap.”
Drawdown Recovery
The Recovery Trap Explained
Why is “chasing losses” mathematically doomed?
- Lose 10%: Need +11% gain to break even. (Manageable).
- Lose 25%: Need +33% gain. (Hard).
- Lose 50%: Need +100% gain. (You must double your remaining money just to get back to zero).
- Lose 90%: Need +900% gain. (Impossible without extreme risk).
This tool is a reminder: Capital Preservation is the #1 Rule. It is mathematically easier to protect your chips than to win them back after a large drawdown.
Frequently Asked Questions (FAQ)
Does this apply to flat betting?
Yes. If you lose 50% of your bankroll, your “unit size” (if using percentage staking) drops in half. This means you need to win twice as many units as you lost to recover the monetary value.