> ## Documentation Index
> Fetch the complete documentation index at: https://www.questforedge.io/llms.txt
> Use this file to discover all available pages before exploring further.

# Surviving 20 Losses in a Row

#### Objective

To evaluate whether a trading system can remain viable during an extended losing streak, and how risk per trade affects survivability.

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#### Setup

* Initial capital: \$10,000
* System: positive expectancy
* Win rate: 40%–50%
* Scenario: 20 consecutive losses
* Risk per trade: 1%, 3%, 5%

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#### Key Assumption

Losing streaks of this magnitude, while rare, are statistically possible over a large number of trades.

This case focuses on **survival**, not profitability.

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### Equity Impact

**Figure — Impact of risk over 20 consecutive losses**

\[INSERT CHART HERE]

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### Results

After 20 consecutive losses:

* **1% risk → \~ -18% drawdown**
* **3% risk → \~ -45% drawdown**
* **5% risk → \~ -64% drawdown**

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### Interpretation

All systems experience the same sequence of losses.

The difference in outcome is entirely determined by **risk per trade**.

At lower risk levels, the system remains structurally intact.\
At higher risk levels, the same sequence produces critical drawdowns.

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### Recovery Implications

Drawdown directly impacts recovery requirements:

* -18% → +22% needed
* -45% → +82% needed
* -64% → +178% needed

As losses increase, recovery becomes non-linear and progressively harder.

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### Structural Insight

A trading system does not fail because of losses.

> It fails when it cannot survive the distribution of those losses.

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### Conclusion

Extended losing streaks are a natural outcome of probabilistic systems.

Risk per trade determines whether these events are:

* survivable
* or destructive

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### Final Insight

The objective is not to avoid losing streaks.

> It is to ensure the system remains operational when they occur.

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### Next Step

→ *How Much Should You Risk Per Trade?*