The recovery formula
Gain needed = 1 ÷ (1 − loss) − 1. Losing 10% needs +11.1%; 20% needs +25%; 50% needs +100%; 90% needs +900%.
| Loss | Gain needed |
|---|---|
| −10% | +11.1% |
| −20% | +25.0% |
| −30% | +42.9% |
| −50% | +100% |
| −75% | +300% |
Why prop firms cap your losses
Small drawdowns are easy to recover; large ones become almost impossible. Daily and maximum loss limits force the habit that keeps professional traders in the game: cut losses while they are still small.