Financial Nirvanaby Pradeep Rawal
Learning game

The Drawdown Recovery Game

A 50% loss needs a 100% gain to recover. How good is your intuition for the rest? Play six rounds, then explore recovery times and real NIFTY 50 drawdowns.

Round 1 of 6Score 0 / 18

Your portfolio has fallen by

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What gain do you need just to get back to where you started?

Recovery explorer

Gain needed to recover
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Years to recover at that return
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Gain needed to recover from each size of fall

What this game teaches

Losses and gains are not symmetrical. If a portfolio falls 50%, a 50% gain does not restore it: it needs to double. The reason is that the recovery starts from a smaller base.

Gain needed to recover = Loss ÷ (1 − Loss)
Example: a 40% loss needs 0.40 ÷ 0.60 = 66.7%

Up to about 20%, the gain needed is only a little larger than the loss. Beyond that it grows quickly: 75% needs 300%, and 90% needs 900%. That is why avoiding large losses matters more than catching large gains, and why the first rule of trading is to survive.

Real drawdowns in the NIFTY 50, 2019 to 2026

Every fall of 10% or more in the NIFTY 50 price index in our data set, with the time it took to regain the previous peak:

NIFTY 50 daily closes from NSE, price index (dividends excluded). A drawdown ends when the index closes at or above its previous peak.
PeakTroughFallRise neededBack at the peakMonths from trough
14 Jan 202023 Mar 2020−38.4%+62.4%9 Nov 20208
18 Oct 202117 Jun 2022−17.2%+20.8%24 Nov 20225
26 Sep 20244 Mar 2025−15.8%+18.7%2 Jan 202610
2 Jan 202630 Mar 2026−15.2%+17.9%Not yet recovered–
3 Jun 201919 Sep 2019−11.4%+12.9%27 Nov 20192

The deepest fall in this period was 38.4%, from 14 Jan 2020 to 23 Mar 2020. An index investor who stayed invested needed a rise of 62.4% to get back. The most recent fall, from 2 Jan 2026, had not been fully recovered by the end of our data. Broad indices have so far recovered from every major fall, though sometimes slowly; individual stocks often never do. A trader using leverage at the bottom of such a fall may not survive to see the recovery.

Using this in practice

  • For investors: decide your equity allocation by the fall you can live through without selling. If a 40% fall would make you sell, hold less equity. See the asset allocation guide.
  • For traders: set a maximum drawdown (for example 15% to 20%) at which you stop and review, and size trades so that an ordinary losing streak cannot get near it. Try the blown-account challenge.

Frequently asked questions

What is a drawdown?

The fall in the value of a portfolio or index from its highest point to a later low, usually expressed as a percentage. The maximum drawdown is the largest such fall over a period.

How long do stock market recoveries take?

It varies widely. The NIFTY 50 table above shows recent examples. Some falls recovered within months; historically, some major indices have taken many years after big bubbles burst.

Does averaging down help recovery?

For a diversified index fund it can, because the index is likely to recover. For individual stocks it depends on whether the business is sound; averaging into a failing business increases the loss. Try the falling knife game.

This game uses simulated prices and random outcomes for learning. It is not a trading platform, uses no real money and does not predict real markets. Everything runs in your browser; nothing you enter is sent to us. Read our disclaimer. Built and checked by Pradeep Rawal.