Max losing streak calculator
Plan for the losses a working system can produce.
Calculator
Worked example
A strategy that wins a bit less than half the time, risks a small share of the account per trade and has a firm account loss limit. These are the calculator's default inputs and the result it returns for them.
| Win rate | 45% |
|---|---|
| Trade horizon | 200 trades |
| Risk per trade | 1% |
| Account loss limit | 10% |
| Bad case streak | 12 losses |
| Typical worst streak | 8 losses |
| Loss limit breach | 19.9% |
The distribution assumes each trade outcome is independent.
Questions
- What does the max losing streak calculator show?
- It shows the longest run of back to back losses you should plan for over the trade horizon, based on your win rate.
- What is the difference between typical and bad case?
- The typical worst streak is the median, so half of outcomes have a shorter longest streak. The bad case is the 95th percentile, so 95% of outcomes stay within it.
- What is a common mistake?
- Treating a long streak as a sign the system broke. Sound systems produce long streaks too. Size your trades so the bad case streak stays inside your loss limit.