Consecutive Losers

A run of losses can really throw you off your game. Here is an example showing how expected returns can change depending on where you are in a run of losses.

For every 100 trades, you should know the likelihood of a losing streak, for 2 great reasons.

It gives you a heads up on your risk per trade. Most traders blow up due to too much leverage. If you know the likelihood of a string of losers, you can plan your risk management strategy accordingly.

The impact on self-esteem. We know that we make different decisions when thinking about losses, instead of thinking about profits. These can impact your returns.

Here are some simple facts, you only need to know your Win Rate (Percentage of your trades that are winners).

Lets assume you trade 100 trades per month.

If your win rate is 60%, you will have a losing streak of 5 trades every second month. 
If its 50%, this increases to 8 losing trades in alternate months. 
If its 40%, you can expect 10 losing trades.

Expect the unexpected, and plan for it.  You can only manage what you can measure.