Recovery factor is net profit divided by maximum drawdown. A recovery factor of 1.0 means you've earned back exactly what your worst pit cost you — even, but no margin. A recovery factor of 5.0 means your total profit is five times the deepest hole you've ever been in. The metric tells you whether the strategy's gains have decisively out-paced its worst pain or whether you're still essentially recovering. Sharpe asks how smooth, Calmar asks how proportional, recovery factor asks how far past the wound have you healed.
Total net profit €18,000, maximum drawdown €4,500.
How to read the value: - Below 1.0 — your profits haven't yet recovered the worst drawdown. The pit is still bigger than the climb. - 1.0 to 2.0 — barely past even. The strategy's edge hasn't decisively beaten its worst phase. - 2.0 to 5.0 — solid. Profit clearly out-paces the worst pain. - 5.0 to 10.0 — strong. Either a long sample or a small drawdown — both are good signs. - Above 10.0 — exceptional, but check the time frame. A high recovery factor on a young account means the real drawdown is still ahead.
Like Calmar, recovery factor flatters early and gets honest only once you've survived a real losing stretch.
Recovery factor is the metric you check when you want to know whether the strategy has actually proven itself past its worst day. A trader who's up €2k after surviving a €5k drawdown isn't profitable in any meaningful sense — they're still climbing back. Recovery factor flips the spotlight off the entry-quality and onto the survival arithmetic: did the strategy earn enough to make the pain worth it?
In TradeOnyx recovery factor sits in the Overview tab under Advanced metrics, paired directly with Maximum Drawdown. They're shown side-by-side on purpose: one number tells you how big the worst pit was, the other tells you how far above it you've climbed. Together they're the survivability story, no further math required.
Use the Overview period filter to compare recovery factor across windows. A recovery factor that falls while net profit keeps rising means a new, deeper drawdown landed — and that's exactly the early-warning that an equity-curve glance can miss. TradeOnyx surfaces it on every closed trade, automatically, so you spot the regime shift the moment it happens.