How do you handle a losing streak?
Every method has them, and even one with a real edge can produce eight or ten losses in a row. How you respond is often what separates a drawdown from a blown account.
We'd like to hear:
- the longest losing streak you've had, in trades
- whether you changed anything during it: size, rules, time away
- how you decided whether the method had stopped working or it was ordinary bad luck
The maths is covered in drawdown and recovery. This thread is for the personal side: what it felt like and what helped.
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A bit of maths that helps put a losing streak in context, before deciding whether anything is wrong.
For a method that wins 40% of the time, the chance of a loss on any trade is 60%. The chance of five losses in a row is 0.6 multiplied by itself five times, about 8%. Over a few hundred trades, a streak of eight or more is quite likely to happen at some point, even though the method hasn't changed.
That's why risk per trade matters so much. At 1% risk, ten losses cost about 10% of the account and need roughly an 11% gain to recover. At 5% risk, ten losses cost about 40% and need a 67% gain.
A practical rule some traders use: if a streak exceeds what your own trade history says is normal, halve position size until the method's results are back in their usual range, rather than changing the rules mid-streak.
More in drawdown and recovery maths.
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