Risk
What is recovery factor?
Your net realized profit divided by your worst drawdown.
Definition
Your net realized profit divided by your worst drawdown.
Recovery factor, explained
If you have banked $6,000 and your deepest drawdown was $2,000, your recovery factor is 3. It answers a blunt question: how much did you earn for the worst pain the strategy put you through? Above 1 means you have made back more than your deepest valley; the higher it is, the more resilient the book.
Where recovery factor shows up in a journal
A trading journal is where this stops being a definition and becomes your own number. sizeforzero computes it from the trades you import or log, alongside the rest of your analytics vocabulary, and every figure in the app carries an (i) that explains it in the same plain English you just read.