Plan for the streak, because it is coming
Variance guarantees that even a profitable edge will hand you painful runs of losses. This calculator quantifies how likely and how frequent they are so you size for survival, not for the best case. Turn that into a ruin probability on the risk of ruin calculator.
Losing 7 in a row isn't bad luck — it's math
At a 40% win rate (common for many strategies), probability of 5 losses in a row is 0.6^5 = 7.8%. Over 100 trades, you'll almost certainly see at least one losing streak of 5. Over 500 trades, streaks of 7–8 losses are expected, not exceptional.
Formula: P(streak of n losses) = (1 − win_rate)^n. At 50% WR, losing 7 straight: 0.5^7 = 0.78%. Sounds rare. But probability of hitting at least one such streak in 200 trades: 1 − (1 − 0.0078)^(200−6) ≈ 78%. Almost certain.
Why this matters: sizing that feels safe for one trade becomes account-threatening during streaks. At 2% risk per trade, 7 consecutive losses drops your account 13.3% (compounded). At 5% risk per trade, the same streak cuts you by 30.2%. Most traders don't model streak risk when sizing — they model individual trade risk.
Related: required win rate, stop hunt probability, position sizing.