Definition
The largest percentage loss you incurred on a single closed trade.
Formula
- Stocks: Biggest % Loser = (Loss on Trade / Investment on Trade) * 100
- Forex: Biggest % Loser = (Loss on Trade / Account Balance Prior to Trade) * 100
Examples
Stocks Example:
- Investment: $1500
- Loss: -$450
- Biggest % Loser: (-$450 / $1500) * 100 =- 30%
Forex Example:
- Account Balance Prior to Trade: $8000
- Loss: -$500
- Biggest % Loser: (-$500 / $8000) * 100 = -6.25%
Key Points
- Risk Identification: Helps you identify trades with disproportionately large losses in terms of percentage.
Considerations
- Investment vs. Account Balance: The percentage loss calculation differs for traditional investments vs. forex trading:
- Traditional Investments: Percentage loss is calculated based on the trade’s specific investment.
- Forex: Percentage loss is often calculated based on the overall account balance before the trade took place.
