For Business

Trading Math

How to Calculate Percentage Gain and Loss Correctly

A percentage gain or loss is the change divided by what you had at the start of the period it describes. This paper shows you the same real loss against two bases, ten real days each written against its own base, why a run of percentages is multiplied and not added, and where the two balances of a whole-period percentage come from on your platform.

Difficulty
Intermediate
Reading time
5 min
Pages
7
Reviewed by
Saman Rahbar

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The same loss, two bases

A percentage is a change divided by a base, and the base is what you had at the start of the period the percentage describes. On 28 August 2026 the ten-day list — one lot of the euro against the dollar bought at each day's open and sold at its close, on a five-thousand-dollar account — lost $710. Against the 5,000 the list started with on 24 August that is 14.2 per cent. Against the 4,811 the account held on the morning of 28 August, when the loss happened, it is 14.8. The second is the correct percentage for that day, because that is what the day started with.

Ten days, ten bases

Every day on the list has its own base, because every day's result changes the balance the next day starts with. The $387 made on 3 September is 9.2 per cent, against the 4,207 the account held that morning; against the 5,000 the list began with it would read 7.7, and that would be a percentage of the wrong thing. A pip is the fourth decimal place, ten dollars at one lot, so each day's dollars are its pips times ten, and each day's percentage is those dollars over that morning's balance.

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