Repeated percentage losses: a fixed-fraction worksheet
Repeatedly losing a fixed percentage of the remaining balance is different from losing the same cash amount each time.
A percentage can refer to a changing base
Repeatedly losing a fixed percentage of the remaining balance is different from losing the same cash amount each time. The former is multiplicative. This article is an arithmetic stress scenario, not a recommended risk fraction or a claim that stop orders reliably limit losses to a chosen percentage.
Five exact 2% losses leave about 903.92 from 1,000, while five fixed 20-unit losses leave 900. These are arithmetic assumptions, not guarantees about stop execution or streak probabilities.
Open full-size diagram ↗Calculate five invented losses
Start at 1,000 units and assume each loss is exactly 2% of the then-current balance. The balances after the first three losses are 980, 960.40 and 941.192. After five, the balance is 1,000 × 0.98 to the fifth power = 903.9207968. The cumulative decline is about 9.6079%, rather than exactly 10%. Keep precision internally and round only the reported balance.
Worked example: After one loss: 980; After three losses: 941.192; After five losses: 903.921. Invented values; units follow the row labels and article.
Open full-size diagram ↗Contrast a fixed cash loss
Five losses of 20 units each would instead leave 900. The first loss matches the percentage model, but later losses do not, because the percentage model uses a shrinking base. Fees, minimum quantities and price gaps can make actual outcomes depart from either simple model.
Calculation checklist: Fraction per modeled loss: 2%; Cumulative decline: About 9.6079%; Five fixed 20-unit losses: Ending balance 900. Preserve these definitions when reproducing the example.
Open full-size diagram ↗Use the worksheet to expose assumptions
Record whether the fraction applies to balance, equity or another base and when the base is measured. A modeled streak does not estimate its probability or establish safety. SanForex’s recovery calculator can show the gain required after a stated percentage decline, but it does not estimate streak probabilities or enforce execution losses.
Sources and conventions
Examples are hypothetical. Worked examples state their formulas and assumptions in the article; our methodology explains the related calculators. Broker contract specifications determine actual lot, margin and execution conditions. These sources document definitions and data; a source link does not imply endorsement of SanForex or a trading service.
These materials are prepared with AI assistance and checked against worked examples and deterministic calculation tests where applicable. They are not an expert suitability assessment or investment advice.
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