Math of Gains of Losses

One of the most fascinating perspectives on investments can be derived from the relationship between gains and losses. Very often, people have a different perception of what it means to recoup losses that have occurred. This is where we want to raise awareness with our interactive win-loss calculator.
Interactive Profit/Loss ("Recovery") - Calculator
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Visual representation of the profit/loss ratio via diagram view
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To get an idea of the ratio: A gain of 50% does not allow a portfolio to compensate for a loss of 50%. The reality is that your investment has to double in order to fully compensate for the halving. So it would take a gain of 100% to offset a loss of 50%. The following overview illustrates in detail how gains are related to losses in the mathematical view.

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Portfolio development - compensation of losses

Feel free to use the values that are relevant to you for the individual presentation.
Starting account balance Percentage Loss Ending account balance after loss Needed percentage gain to restore loss Ending balance after gain
$1.000 -5% $950 5,3% $1.000
1.000 -10% 900 11,1% 1.000
1.000 -15% 850 17,6% 1.000
1.000 -20% 800 25,0% 1.000
1.000 -25% 750 33,3% 1.000
1.000 -30% 700 42,9% 1.000
1.000 -35% 650 53,8% 1.000
1.000 -40% 600 66,7% 1.000
1.000 -45% 550 81,8% 1.000
1.000 -50% 500 100,0% 1.000
1.000 -55% 450 122,2% 1.000
1.000 -60% 400 150,0% 1.000
1.000 -65% 350 185,7% 1.000
1.000 -70% 300 233,3% 1.000
1.000 -75% 250 300,0% 1.000

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Steep Road to Recovery

Experienced investors and traders know that opportunities and risks correlate with each other. Conversely, high expected returns mean that the chance of achieving them is only possible by taking higher risks. The riskier a financial instrument is, the more important it is to understand how it works and which parameters influence the price formation. Trading in speculative products such as warrants or CFDs requires special knowledge of the subject matter. Theoretical knowledge and practical experience are a basic requirement for this. Careless handling, on the other hand, inevitably leads to 'good advice being expensive'. The loss of the invested capital is possible. If the losses have to be realised, recovery is no longer possible.

Part of the information offered by ayondo relates to margin trading, especially CFDs and foreign exchange contracts (FX). With the content, especially in the 'Further Education' and 'Tools' sections, we would like to contribute to making less experienced investors in particular aware of topics such as risk management. It is essential to us that, regardless of your motivation, you understand that total losses can never be ruled out if you are careless or insufficiently prepared. Inform yourself and take advantage of the opportunities to gain practical experience in virtual environments. Do not start investing your own money until you have prepared thoroughly beforehand. Never be tempted by supposed lost profits.

If you want to know what the warning notices of the brokers are all about, usually placed in the footer, you can find the relevant information here.

1 You have the option of using your own values for the calculation. If you subsequently want to share your overview with others, this is possible without any problems. Copy the short link below the input field and paste it into your blog, website or message.