Definition
The total loss incurred by your losing trades over a specified period.
Formula
Return on Losers = Sum of (Losses on Losing Trades)
Example
Using the same trade history as the previous example:
- Trade 1: Profit of $350
- Trade 2: Loss of $100
- Trade 3: Profit of $150
- Trade 4: Profit of $80
- Trade 5: Loss of $50
Your Return on Losers would be: -$100 + -$50 = -$150
Key Points
- Loss Analysis: Helps you understand the magnitude of your losses and identify areas where your strategy might be vulnerable.
Considerations
- Risk Management: This stat should be considered alongside your “Return on Winners” to evaluate your overall risk-reward profile.
