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Loss Comfort Zone

"Loss comfort zone” is the percentage of loss you can experience on a single trade and not lose sleep at night. Every investor has a loss comfort zone, beyond which they will become very fearful and uncomfortable.

Additional Comments:

If you invest in the stock market, you are guaranteed to lose money on some trades. Some investors can tolerate a loss of 20 percent on a single trade; some 10 percent; some as much as 50 percent or more; and some as little as 5 percent.

Only you know your own loss comfort zone and your tolerance for loss.

Related Terms:

Stop Loss
It is advisable to protect loss potential by entering an order that will "stop" the trade ...

Stop-Loss Order
An order to sell when the price of the stock declines to, or below, a stated ...

Stop Market
This type of stop loss order is known by various names, such as "stop," "stop loss," ...

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