Eight losses in a row. By the sixth you're rereading your rules. By the eighth you're sure something broke: the market changed, the setup stopped working, you lost your touch.
Most of the time nothing broke. You just met a number that was always in your strategy, waiting.
1. How long a losing streak to expect
We took a plain question: if every trade wins with the same probability and trades don't depend on each other, how likely is it that somewhere in your next 500 trades you'll see a streak of N losses in a row? Here are the exact probabilities.
Read the 50% row again. A strategy that wins every second trade will, almost certainly, give you six losses in a row within 500 trades, and more likely than not eight. That isn't bad luck or a broken edge. It's what a coin does.
500 trades sounds like a lot. At three trades a day it's less than a year.
2. What the streak costs depends on one setting
The streak doesn't decide how much you lose. Your risk per trade does. Ten losses in a row, each risking a fixed share of the current balance:
- 1% per trade: the account is down 9.6%
- 2% per trade: down 18.3%
- 3% per trade: down 26.3%
Put that next to a challenge with a 10% maximum loss. At 1% a ten-loss streak leaves you just inside. At 2% you are out after six losses in a row (down 11.4%), and the 50% row says six in a row is close to certain.
The strategy is the same in all three cases. Only the number you typed before the first trade changed.
3. The streak is not the dangerous part
The losses themselves are survivable if the size is right. What turns a streak into a blown account is what traders do during it:
- the trade taken a minute after a loss, to "get it back";
- the risk raised on the next trade, because "it has to turn now";
- the stop moved further away so this one doesn't count.
A streak at 1% is a bad week. A streak where the risk doubles after every loss ends the account in a day.
4. Three questions to answer before the streak arrives
- What is my risk per trade, and could my account and my challenge survive ten losses in a row at that size?
- What is my daily loss limit, and will I really stop when I reach it?
- Who or what stops me from raising the risk right after a loss?
The first two are numbers. The third is the hard one, because in the moment it never feels like revenge. It feels like a good setup.
How RiskDeck fits in
RiskDeck works out the lot from your risk and your stop, so every trade risks the share you chose. Its Second Brain watches, among other things, for a loss a moment ago, a losing streak and risk rising straight after a loss: when one applies, the first press shows the reason above the button and only the second press sends the trade. It never refuses on its own. The daily, weekly and monthly loss limits you set can refuse new trades when you choose Guard or Hold. Limits count from your stops, so a price gap or slippage can take a loss past a limit.
Method: exact probability over 500 independent trades with a fixed win rate (dynamic programming, not a simulation). Real trades are not perfectly independent, so treat the table as a guide to what to expect, not a promise either way.
