Losing streaks

Summary

Even a sound approach has runs of losses. With a 50% success rate, five or six losses in a row will happen sooner or later. If each loss is small, a streak is uncomfortable but survivable. If you raise your size to win it back, a normal streak can become a disaster. Many traders cut their size after a set number of losses and take a break.

Key points

• Long losing runs happen even when the approach is sound.
• Raising size to win losses back is how accounts get wiped out.
• Cutting size and pausing after a streak protects the account.

Check yourself

What is a common mistake during a losing streak?

Practice