The max streak is the longest run of winning, or losing, trades in a row. It is not an anomaly to fix: it is a mathematical consequence of your win rate, and knowing how to compute it in advance stops you abandoning a system that works.
A real sequence
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A losing streak is a run of trades closed at a loss, one after another, with no winner in between. The max streak is the longest one observed over the measured period. It is as much a behavioural statistic as a performance one: it does not say how much you lost, it says how many times in a row you had to take it with no proof the system still worked.
It is directly tied to win rate. The lower the win rate, the longer the runs, and that is not bad luck: it is what the distribution mechanically produces. A system with 40% accuracy will produce runs of six or seven losers, regularly, for as long as you run it.
Longest expected losing streak ≈ ln(N) ÷ −ln(loss rate)
N is the number of trades over the period, and the loss rate is 1 − win rate.
This formula gives an order of magnitude, not a guarantee: the real streak can exceed it, and one day it will.
It assumes independent trades. If you raise your size after a loss, streaks become far more expensive than this calculation announces.
Expected streak ≈ 10 losers in a row, at least once in the year. That is not a worst case, it is the normal case, and your risk per trade must be set to cross it without stopping.
The sequence at the top of this page is a real example: 20 trades, 8 winners, so 40%, and six losses in a row in the middle. The formula announces about 5.9 over twenty trades: that streak is nothing exceptional, it is exactly within the norm.
Multiply the streak expected over the year by your risk per trade: that is what the bad run will cost you. If the amount would stop you taking the next trade, it is the size that must come down, not the method that must change.
Compare the streak you are living through to the one your win rate makes likely. As long as it stays in that order of magnitude, nothing is broken, however unpleasant it is to cross.
That check turns an impression into a figure at the exact moment the impression is most misleading, that is in the middle of the streak.
The first flaw is the break-even trade. Depending on the rule used, it interrupts the streak or is ignored, and the same sequence can show a streak of six or of nine. The figure only means something with its rule.
The second is the streak counted across different sizes. Six losses at 0.5% and six losses of which two at 3% make the same streak length and not remotely the same damage.
The third is confusing a streak of trades with a streak of days. Five losing days in a row can contain winning trades, and they are not judged against the same win rate.
The classic mistake. Reading a losing streak as proof the system is broken. That is the exact moment most traders switch method, and lose the one thing that was producing a result: repetition. A streak is judged against what your win rate makes likely, not against how it feels.
| Indicator | Formula | What it measures | When to use it |
|---|---|---|---|
| Max losing streak | longest run of losers | The endurance the method demands | Setting risk per trade |
| Maximum drawdown | worst peak → trough | The amount of the worst fall | Measuring what a bad run costs |
| Win rate | winners ÷ total | How often you win | Predicting the expected streak |
| % of capital risked | risk ÷ capital | The size of each loss | Knowing what the streak will cost |
ln(number of trades in the year) divided by −ln(loss rate). Doing it in cold blood, with your own win rate, completely changes how you live through the streak when it comes.
The expected streak is not a ceiling: the real one will exceed it one day. Your risk per trade must leave room beyond it, otherwise the first slightly long streak decides for you.
A daily loss limit or a stop after a number of losses in a row, set beforehand, are rules. Changing method in the middle of the streak is a reaction, and that is what costs.
It depends only on your win rate and your number of trades. At 50% accuracy over 100 trades, a run of seven is expected. At 40% over 200 trades, a run of ten is. These figures are not accidents, they are how the distribution normally behaves.
Stopping because the system seems broken, no: the streak was predictable. Stopping because your daily loss limit is hit, yes, and that is a mechanical rule that does not depend on how you feel. The difference between the two is exactly what separates a rule from a reaction.
No more than a losing streak is a bad sign. Both come from the same distribution. A winning streak is arguably more dangerous, because it installs a confidence that pushes you to raise size right before the run ends.
By setting risk per trade before it happens, not during. If your expected streak is ten and you risk 1%, it costs roughly 10% of the account: that is absorbable. If you risk 4%, it costs 34% and leaves you unable to climb back.
Not necessarily. The formula gives an order of magnitude, and the real streak regularly exceeds it. If your observed streak is twice the expected one over several hundred trades, however, your real win rate is probably lower than you think.
In Tradoshi, the Reports screen shows the Max winning streak and the Max losing streak, computed in the chronological order of your trades, and, in the Days group, the streaks of winning and losing days. A trade closed at zero interrupts the streak.
The Track record card on the Dashboard sums them up in one line, wins and losses, and the recap after an import flags your longest losing streak. The rule to stop after a number of losses in a row is set in Settings, and the live session alerts you when you cross it.
To go deeper on this: read the full guide. Every term is gathered in the glossary.