Recovery from drawdown
How many bars it took, in past falls, for price to get back to its previous peak.
What it shows
After a drawdown, price either returns to the earlier peak or it does not. We list each past drawdown deeper than 10% and the number of bars from the low to the point when the old peak was passed.
A 50% fall needs a 100% rise to recover. The math is asymmetric: the deeper the fall, the larger the gain needed.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Find drawdowns deeper than 10%.
- Record the peak date and the low date.
- Find the first date when the close passes the old peak.
- Show bars from low to recovery.
Starting values: Minimum depth 10%. These are proposed and will be tuned on real price data before launch.
How to read it
- The gold line shows the old peak.
- Price falls and later returns to it.
- The gold dot marks the recovery.
Status labels you may see
| Label | What it means |
|---|---|
| Recovered | Price is at or above the last peak. |
| Recovering | Below the peak but above the low. |
| At the low | Within 5% of the low. |
What cancels it
Nothing cancels it.
What traders check next
- Depth.
- Time to recover.
- Market conditions.
Limits
- Few events per stock.
- Some never recover.
- Past times are no promise.
Try it in forecastviz
- Open any ticker and choose Statistics and risk → Recovery from drawdown in the left menu.
- Switch between 3Y, MAX to see how the picture changes.
- Compare with Drawdown and Maximum drawdown on the same chart.
Questions
Why is recovery asymmetric?
A fall from 100 to 50 is −50%. Back to 100 is +100%.
Do all stocks recover?
No.
Related trends
Further reading
- Kaufman, Trading Systems and Methods
- Achelis, Technical Analysis from A to Z
- Mandelbrot, The (Mis)Behavior of Markets
- Sharpe, Mutual Fund Performance
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.