Recovery Factor
Formula
Recovery Factor = net profit / |max drawdown $|
Worked example
Net profit $2,000 against a maximum drawdown of $5,000.
| Net profit | $2,000 |
| Max drawdown ($) | $5,000 |
| Recovery factor | $2,000 / $5,000 |
| Result | 0.40 |
It puts return and risk in one ratio: a system that made $10,000 with a $2,000 drawdown (5.0) is far more comfortable than one that made the same with a $9,000 drawdown (1.1).
Below 1.0 means your peak drawdown is larger than your total net profit so far — common early on or after a rough stretch. Like drawdown, it is sensitive to the single worst decline.
How TradeJournalOS shows it
Shown next to maximum drawdown on the equity curve, using your net profit and worst drawdown over the selected range.
Create a free account to see recovery factor on your own trades.
Frequently asked questions
What is a good recovery factor? +
Higher is better; many traders look for 2.0 or more over a meaningful sample. Below 1.0 means your largest drawdown still exceeds your total profit.
Is recovery factor the same as return? +
No. It scales net profit by your worst drawdown, so it measures return relative to the deepest pain rather than return on its own.