Surviving 20 Losses in a Row
Using a $10,000 starting balance, compare 20 consecutive losses at different fixed risk levels.
The strategy can still have positive expectancy. The case isolates what happens when unfavorable outcomes cluster.
At 1% risk, the sequence is painful but the account retains most of its capital. At 5%, nearly two-thirds of the account is lost and the recovery requirement becomes extreme.
The key variable is not whether losing streaks exist. It is whether the risk framework allows the account to survive them.