Cost of Capital Loss

Capital:	$10,000
Trade(s)	$7,500	$9,000	Difference
1	$7,875.00	$9,450.00	$1,575.00
2	$8,268.75	$9,922.50	$1,653.75
3	$8,682.19	$10,418.63	$1,736.44
4	$9,116.30	$10,939.56	$1,823.26
5	$9,572.11	$11,486.53	$1,914.42
6	$10,050.72	$12,060.86	$2,010.14
7	$10,553.25	$12,663.90	$2,110.65
8	$11,080.92	$13,297.10	$2,216.18
9	$11,634.96	$13,961.95	$2,326.99
10	$12,216.71	$14,660.05	$2,443.34

Description

Capital of $10,000. One practice cut loss target of 10%, the other only force cut loss at 25%. (Force cut loss is because you are forced to cut loss because your emotion cannot take the falling of your counter's price). The difference loss of capital is $9,000 - $7,500 = $1,500. The table above shows how critical is this $1,500 difference.

Let says after a bad trade you begin to consistently earn 5% from subsequent trades, it takes 6 trades to regain the capital for the higher capital loss compared to 3 trades of the lower capital loss.

Let say no consecutive winning streak. Below is table for 2 bad trades, the third trade suffers another loss (one continue to practice 10% cut loss and the other at 25% force cut loss).

Capital:	$10,000
Trade(s)	$7,500	$9,000	Difference
1	$7,875.00	$9,450.00	$1,575.00
2	$8,268.75	$9,922.50	$1,653.75
3	$6,201.56	$8,930.25	$2,728.69
4	$6,511.64	$9,376.76	$2,865.12
5	$6,837.22	$9,845.60	$3,008.38
6	$7,179.08	$10,337.88	$3,158.80
7	$7,538.04	$10,854.77	$3,316.74
8	$7,914.94	$11,397.51	$3,482.57
9	$8,310.69	$11,967.39	$3,656.70
10	$8,726.22	$12,565.76	$3,839.54
11	$9,162.53	$13,194.05	$4,031.51
12	$9,620.66	$13,853.75	$4,233.09
13	$10,101.69	$14,546.44	$4,444.74

You only able to break even after 10 consecutive 5% gains trades for 25% force cut loss trader but only takes 3 trades to break even for the trader who practice 10% cut loss.

Moreover, for 3 bad trades in 10 trades case, 20 trades to break even if you continue to force cut loss at 25%. So, what if more than that? It takes you ages to get back what you have lost just because you do not have cut loss price.