Losing Streak
Definition
A run of consecutive losing trades. Every strategy with a win rate below 100% produces losing streaks, and their length depends mostly on the win rate and how many trades you take.
Example
“Her backtest showed seven-loss runs were normal, so a six-trade losing streak didn't shake her.”
Detailed Explanation
Losing streaks are a normal part of any trading strategy, not proof that it stopped working. At a 50% win rate, a DayTradingToolkit simulation found at least one run of 6 or more losses in about 80% of 200-trade stretches; at 40% it was about 98%. Traders who expect streaks to be short often abandon a working strategy in the middle of one. The practical defenses are a risk per trade small enough that a long streak is survivable, a daily loss limit, and knowing in advance how long a streak your strategy's tests allow. A streak far longer than your tests suggest is a reason to review the strategy; an ordinary one is a reason to keep following the rules.
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