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How Losing Streaks Actually Behave

A profitable trading system can still produce long sequences of losses. A win rate describes the long-run proportion of winning trades; it does not determine the order in which wins and losses arrive. For a system with win probability p, the probability that one specified block of n trades consists entirely of losses is (1 − p)^n. The practical implication is simple: position size should be chosen for adverse sequences, not only for average results. A system can have positive expectancy and still become untradeable if its normal variance produces a drawdown the trader or account cannot tolerate.