Profit and loss percentage
What percentage of your account did that trade gain or lose, and how much do you need to make to get back to break even?
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How it is calculated
% gain or loss = (closing balance − opening balance) ÷ opening balance × 100.
% gain needed to get back to break even = L ÷ (1 − L), where L is the part already lost written as a decimal: a 20% loss means L = 0.2.
Examples
An opening balance of 10,000 and a trade that makes 200: 200 ÷ 10,000 = 2%, closing balance 10,200.
A 20% loss leaves 8,000: you have to make 2,000 on that 8,000 to get back to 10,000, which is 0.2 ÷ 0.8 = 25%.
The deeper the loss, the harder it is to get back
| Lost so far | Gain needed to break even |
|---|---|
| 10% | 11.11% |
| 20% | 25.00% |
| 30% | 42.86% |
| 50% | 100.00% |
| 75% | 300.00% |
| 90% | 900.00% |
After a 50% loss you have to double what is left to get back to break even. That is why many traders cap the money they can lose on one trade at a small figure; see the guide on the 2% money management rule.