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How Long Can A Losing Streak Last In Trading?

I made eighty-five thousand trading bots take ten thousand trades at the same time.
Why?
To see how much losing and winning streak your win rate can have in a row.

Why is that important?
So you can avoid blowing up your account.
And to see which win rate is best for you of course.
I split eighty-five thousand trading bots into 17 groups.
Each group trades with a different win rate.
From 10% win rate to 90% win rate.
If your win rate is 50%, look here.
If you don’t know your win rate, my neighbor’s dog runs a casino. I will send him your number.
Red bars show the highest losing streaks that have happened so far.
Green bars show the highest winning streak.
All bars quickly settled in this v-shaped pattern.
Data says, if you have a 90% win rate strategy, you can win around 150 trades in a row.
And you can rarely lose more than seven-eight trades in a row.
Nice!
But you don’t have a 90% win rate strategy, do you?
My neighbor has it but doesn’t share it with anyone.
Many people will have around a 50-60% win rate strategy.
So always remember these numbers.
You can win around 25 35 trades in a row in this range.
And lose around 15 to 25 trades in a row.
Don’t risk more than 2% of the account here.
The Winning streak is higher than the losing streak.
That’s actually good for your trading psychology.
But I have seen many trading gurus recommend crazy high-reward-risk ratios.
Like, 3 to 1, 4 to 1, even 5 to 1.
A high reward means you will most likely get a lower win rate.
If a beginner listens to these gurus, they will get some crazy big losing streaks.
Reward risk ratios like 3 to 1 can lose around 60 trades in a row.
Risking 1% per trade would lose more than 50% of the account here.
That’s stupid. Don’t do it, unless it’s the stupid day, of course.
1% risk per trade seems too risky below the 30% win rate.
2% risk looks too risky for 40% and lower win rates.
You can quickly lose most of the account.
Win Rates above 40% look safe enough for 2% risk per trade.
But remember, 2% risk of the current account balance, not the starting account balance.
Heck, you can even increase the risk with higher win rates and be fine.
That’s what I do when I use high-win-rate strategies.
Basically,
Strategies with 30% and lower win rates will give you frequent anxiety.
Strategies with around a 40% win rate will give you headaches.
If you want to win more times and have a peaceful trading mindset, using win rates above 55% is better.
If you are a crazy person and want to lose more than 150 trades in a row, you can select the 10% win rate.

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