Five losses in a row. Your stomach drops every time you open the platform. You start wondering whether the strategy is broken, whether you’re cut out for this, and whether you should try something completely different.
Every trader goes through this. Losing streaks are part of trading, even with a strategy that has a genuine edge. What matters is how you respond: a streak handled calmly is a dip, and a streak handled badly turns into a blown account. This guide covers why streaks happen, how to tell normal variance from a real problem, and a step-by-step protocol to follow when you’re in one.
Losing streaks are normal: the maths
Beginners often underestimate how often long losing runs happen by pure chance. The table below shows the probability of seeing at least one losing streak of a given length during 100 trades, for different win rates.
| Win rate | 4+ losses in a row | 5+ in a row | 6+ in a row | 8+ in a row | 10+ in a row |
|---|---|---|---|---|---|
| 40% | 99.9% | 97.6% | 87.3% | 49.0% | 20.5% |
| 50% | 97.3% | 81.0% | 54.6% | 17.0% | 4.4% |
| 60% | 80.1% | 45.9% | 21.2% | 3.6% | 0.6% |
Our own calculation, assuming each trade is independent and the win rate stays constant. Real trading is messier, so treat these as rough guides, not predictions.
Read that middle row again. With a 50% win rate, you’re more likely than not to hit six losses in a row at some point in 100 trades. For a strategy that wins 40% of the time (common for trend-following and breakout approaches that aim for bigger winners), a run of eight losses is close to a coin flip.
So if you’ve lost five in a row, the honest first thought should be: “This is probably normal. Let’s check.”
The maths of drawdowns: why size matters so much
Losses and recoveries aren’t symmetrical. The deeper you fall, the harder it is to climb back:
| Account drawdown | Gain needed to get back to the start |
|---|---|
| 5% | 5.3% |
| 10% | 11.1% |
| 20% | 25% |
| 30% | 42.9% |
| 50% | 100% |
Simple arithmetic: to recover a loss of L%, you need a gain of L ÷ (100 − L).
Now combine it with the streak table. If you risk 1% per trade, eight losses in a row costs roughly 8% of your account: painful, but recoverable. If you risk 5% per trade, the same streak costs about a third of your account. Small, fixed risk per trade is what turns streaks from disasters into dips. That’s a choice you make before the streak starts.
Variance or a broken strategy? How to tell
A streak alone doesn’t tell you much. Ask these questions instead:
1. Did I follow my rules?
Go through every losing trade and mark it rules followed Y/N. If several were rule breaks, the problem may be execution, not the strategy (see trading discipline). Fixing discipline comes first.
2. Is this streak within what my testing showed?
If your backtest or demo record showed losing runs of up to seven trades and you’re on five, you’re inside normal behaviour. If you’ve never tested your strategy, you have nothing to compare against, and that’s the first thing to fix.
3. Have market conditions changed?
Some strategies suit trending markets and others suit ranges. A trend strategy in a choppy, range-bound market can lose repeatedly. That doesn’t mean the rules are broken, but it may mean adding a filter, after careful testing.
4. Is the sample big enough?
Ten or twenty trades is far too few to judge a strategy. As a rough rule of thumb, wait for at least 50–100 trades of rule-following data before deciding a strategy doesn’t work.
5. Are my losses bigger than planned?
If your average loss is larger than your planned 1R, something is wrong with execution, such as slippage, widened stops or oversizing. That’s fixable.
What NOT to do during a losing streak
- Don’t increase your size to “get it back faster”. This is how a normal streak becomes a blown account. See revenge trading.
- Don’t switch strategy after a few losses. Strategy-hopping guarantees you never collect enough data to know what works.
- Don’t remove your stop-loss because you “can’t take another loss”. The next loss without a stop could be much larger.
- Don’t trade more to “trade your way out”.
- Don’t add money to the account in the middle of a streak.
- Don’t make big decisions while upset, like quitting, buying a course or buying a new challenge. Wait until you’ve done a calm review.
The drawdown protocol (step by step)
Write this into your trading plan now, while you’re calm. Adjust the numbers to suit your own plan and testing. These are examples only.
Level 1: 3 losses in a row, or 3% down from your account peak
– Finish trading for the day.
– Review each trade: rules followed? Y/N.
– No change to strategy or size yet.
Level 2: 5 losses in a row, or 5% down from peak
– Cut position size in half (for example, from 1% to 0.5% risk per trade).
– Trade only your best, most clear-cut setup.
– Do a full written review using the five questions above.
Level 3: 8 losses in a row, or 10% down from peak
– Stop live trading. Move to demo or paper trading.
– Compare your recent trades with your backtest. Are you trading the same way?
– Go back live at reduced size only after a set number of rule-following demo trades (for example, 20).
Climbing back:
– Return to normal size gradually, in steps, as the account recovers (for example, back to full size once you’ve recovered half the drawdown), not in one jump after a single win.
Reducing size in a drawdown means a recovery takes longer, and some traders dislike that. But it protects you from the worst case: a broken strategy or a tilted trader running at full size.
Looking after yourself
Losing streaks are emotionally draining, especially if money is tight.
- Name what you’re feeling in your journal: frustrated, anxious, embarrassed. Lab research suggests that putting feelings into words can reduce the brain’s emotional response (Lieberman et al., 2007).
- Separate the trader from the person. A losing streak says nothing about your worth.
- Take a full break if you need one. A few days away from charts can reset your perspective.
- Check your process score. If you followed your rules through the streak, that’s genuinely good trading, even though it doesn’t feel like it. See process over profits.
- Keep perspective on risk capital. Only trade money you can afford to lose. If a streak is affecting your bills or your sleep, your size or your account is too big for your situation.
Exercise: Your streak review sheet
When you hit Level 2, copy this into your journal and fill it in:
- Number of consecutive losses: ___ · Drawdown from peak: ___%
- Rule-following trades in the streak: ___ of ___
- Longest losing streak in my backtest/demo record: ___
- Average loss in the streak vs planned 1R: ___
- Any change in market conditions? ___
- How I’ve felt (one word per day): ___
- Decision: continue at reduced size / move to demo / review strategy (circle one)
- What I’ll do differently from tomorrow: ___
Losing streak checklist
- [ ] I risk a small, fixed percentage per trade, so streaks are survivable.
- [ ] I know the longest losing run in my testing.
- [ ] My drawdown protocol (Levels 1–3) is written into my trading plan.
- [ ] I review rule-following before blaming the strategy.
- [ ] I never increase size during a drawdown.
- [ ] I wait for 50–100 trades of data before judging a strategy.
- [ ] I rebuild size gradually, not after one win.
Key takeaways
- Long losing streaks happen by chance, even with a strategy that has an edge. With a 50% win rate, a run of six losses in 100 trades is more likely than not (on simple assumptions).
- Drawdowns get harder to recover from the deeper they go, so small fixed risk per trade is essential.
- Check rule-following, your testing and the sample size before deciding a strategy is broken.
- Follow a pre-written drawdown protocol: stop for the day, cut size, then move to demo.
Frequently asked questions
How many losing trades in a row is normal?
It depends on your win rate and how many trades you take. Use the table above as a rough guide, and compare against your own tested results.
Should I take a break after a losing streak?
Often, yes. A short break and a written review are usually better than pushing on while frustrated. Coming back at reduced size is a sensible middle ground.
What about losing streaks on a prop firm challenge?
Challenges add daily and overall drawdown limits, so streaks matter even more. See prop firm challenge pressure.
Related pages
- Next: Prop firm challenge pressure
- Also: Revenge trading and tilt · Trading discipline · Psychology hub
- Course and strategies: Why most traders lose · Moving average crossover · Opening range breakout
Disclaimer: This page is general education, not financial, investment, medical or mental-health advice or a personal recommendation, and it doesn’t take your circumstances into account. Examples are hypothetical, for illustration only, and not an invitation to buy or sell. Learning a strategy doesn’t guarantee profits. Past performance is not a reliable guide to future results. Futures, spread bets and CFDs are complex and carry a high risk of losing money quickly because of leverage, and most retail traders lose money. With a real futures account, losses can exceed your deposit. Prop firm challenges are paid evaluations: the fee is usually lost, and funded accounts are usually simulated. Only trade with money you can afford to lose, and speak to an independent FCA-authorised adviser if you’re unsure. Probability and drawdown figures are our own calculations on simplified assumptions, and the protocol levels are examples, not recommendations for your circumstances. If trading is affecting your wellbeing, the National Gambling Helpline (0808 8020 133) and Samaritans (116 123) are free and open 24/7. Read our full risk warning.