At a win rate near 45%, the chance of at least one run of five losses in a row somewhere over 100 trades is about 92%, and of eight in a row about 31%. Losing streaks are far more common than they feel, because a run can start at any trade in the hundred. The calculator works out the exact figure for any win rate, number of trades and streak length.
Expect about 1.2 separate runs of 6 or more. At 1.0% a trade one such run costs about 6.0% of the account.
| Run of | Chance | How many |
|---|---|---|
| 3+ | >99.9% | 7.4 |
| 4+ | 99.4% | 4.0 |
| 5+ | 92% | 2.2 |
| 6+ | 73% | 1.2 |
| 7+ | 50% | 0.7 |
| 8+ | 31% | 0.4 |
| 9+ | 18% | 0.2 |
| 10+ | 10% | 0.1 |
The exact method tracks, after each trade, the chance of currently sitting on 0, 1, 2 and so on losses in a row. A win sends you back to 0; a loss moves you up one; reaching the streak length is counted and stays counted. Run that across every trade and the total is the chance of seeing at least one such streak. It is the same run-length maths the Trade Desk uses for the streak line on its published record.
It assumes each trade is independent of the last. Trades that move together, such as three tech stocks in the same week, make long streaks likelier than this.
| Win rate | 4+ in a row | 5+ | 6+ | 7+ | 8+ |
|---|---|---|---|---|---|
| 35% | over 99.9% | 99.5% | 96% | 85% | 69% |
| 45% | 99.4% | 92% | 73% | 50% | 31% |
| 55% | 92% | 65% | 36% | 18% | 8.4% |
Even at a win rate near 55%, a run of six losses over 100 trades has about a 36% chance. A method that wins less than half the time should expect runs of seven or eight at some point, and plan its risk for them.
A trader wins 45% of the time and takes a hundred trades a year. The chance that any one trade loses is 0.55, so the chance that a given five trades all lose is 0.55 × 0.55 × 0.55 × 0.55 × 0.55, about 5.0%. That looks small, but a run can start at almost any of the hundred trades, and the run-length method puts the chance of at least one run of five or more in the year at about 92%, with about 2.2 such runs expected.
Pick a risk per trade so that the streak you would expect still leaves you calm: at 1% a run of eight costs about 8%; at 3% it costs about a quarter of the account. Then decide in advance what a streak means, such as checking every loss was at its planned stop and size, so a normal run does not push you into changing a working method. See the longest streaks on a published record for what a real run looked like.
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Get this week’s setupsAt a win rate near 45%, a run of five or more losses somewhere over 100 trades is about 92% likely. At a win rate near 55% it is still about 65%.
For one specific run of k trades it is the loss rate to the power k. For a run anywhere in n trades, use the run-length method above, because the run can start at any trade.
Not if the run is within the odds for your win rate and every loss was taken at its planned stop and size. A run far beyond the odds, or losses that ran past their stops, is the signal to review.
It depends on the win rate and how many trades you take. At 45% over 100 trades, runs of six are more likely than not and runs of eight happen about one time in three.