Losing streaks are not a signal
Every method with losses produces runs of them, and the runs are longer than intuition suggests. A method that wins half its trades will, over a few hundred trades, almost certainly produce a run of seven or eight losses somewhere. Nothing has gone wrong when that happens. It is a property of sequences, not a message from the market.
The problem is that a streak arrives with a story attached. By the fifth loss the mind has already produced an explanation — the market changed, the edge is gone, something is different now. That explanation feels like analysis and is usually pattern-matching on noise. It is also unfalsifiable in the moment, because the only thing that would settle it is more trades, which is exactly what you no longer want to take.
This is where most working methods die. Not in a drawdown that breaks the account, but in a drawdown that breaks the trader's belief, after which the method is replaced with another one, which then meets its own first streak.
Two things help, both decided in advance. First, know roughly what a normal streak looks like for your method — if your win rate is around 50%, runs of six are ordinary, and knowing that in advance removes most of the story. Second, define beforehand what would actually count as evidence that the method has stopped working: a number of trades, a drawdown depth, a change you can name. Anything decided during a streak is decided by the person the rule exists to protect you from.
And keep the sample honest. Twenty trades tells you almost nothing about a method either way, in either direction.
What to take away
- Long losing runs are an ordinary property of any method with losses.
- A streak arrives with an explanation attached, and the explanation is usually noise.
- Most working methods are abandoned during a normal streak, not a fatal one.
- Define in advance what would count as evidence the method is broken.
This chapter, measured against your own trades
In the app the same chapter ends in your figures rather than an example: how often you did the thing it describes, over your last ninety days. You pick one change to make, and Evidence checks afterwards whether it actually changed — from your journal, arithmetic, no opinion involved. Questions you get wrong come back a week later and again a month after that.
Open the free plan →Check that it stuck
Answers shown — in the app these are asked before you see them, and the ones you get wrong come back after a week.