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Glossary / Performance metrics

Average loss

Definition

Total loss from losing trades divided by the number of losing trades.

Why it matters

A rising average loss over time is the earliest sign that stops are being widened or moved, which is the most common way a working strategy stops working.

Example

$7,000 of gross losses across 35 losing trades is a $200 average loss. If your planned risk was $150, your stops are being widened by a third on average.

How to track it in a journal

TradeStack calculates the core performance numbers — win rate, average win and loss, profit factor, expectancy, drawdown and consistency — automatically from imported trades, so average loss stops being something you estimate and becomes something you read.

Related terms

Expectancy
The average profit or loss you can expect from each trade over a large sample.
Profit factor
Gross profit divided by gross loss.
Win rate
The share of your trades that close in profit.
Average win
Total profit from winning trades divided by the number of winning trades.

Questions that use this term

Keep reading

Trading journal guides
Expectancy, profit factor, drawdown, backtesting and the PDT rule.
Free trading calculators
Position size, risk-reward, expectancy and options profit.
Expectancy calculator
Expected profit per trade from your own numbers.
Broker CSV export guides
Step-by-step exports for Tradovate, NinjaTrader, IBKR and more.
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