A strategy wins 50% of trades. Will it have a streak of 5 stops in a row?

Most likely yes: within 100 trades it happens most of the time. Streaks are part of any strategy’s statistics. That’s why risk is chosen so the account survives them.

After three stops in a row Mira wants to double the lot. What’s smarter?

Halve the risk or end the day. A streak is the time to protect the account. Lower risk or a pause stops a normal streak from turning into failure.

1% is left to the 8% target. What’s the best way to finish?

With the usual risk, over a few trades. The target won’t run away. A big trade at the end risks setting you back a week.

The math of streaks

Lesson 8 of 12 in the course “Prop Trading”. Free, with animations and a quiz.

Streaks happen

Even a good strategy that wins 50% of trades will see five stops in a row. Within 100 trades that happens in about 8 cases out of 10. So the question isn’t “will there be a streak”, it’s “will the account survive it”. Risk size decides that.

Risk vs a streak

Six stops in a row at 0.5% risk is −3%: annoying but calm. At 1% it’s −6%, still alive. At 2% it’s −12%, and the 10% overall limit is already broken. At 3%, −18%. Same streak, different outcome, only because of risk size.

How many trades to the target

Say a strategy wins 45% of trades with a 2R target. On average each trade brings 0.45 × 2 − 0.55 × 1 = 0.35R. An 8% target at 1% risk is 8R, so about 23 trades. That’s a couple of calm weeks. There’s no rush, and rushing is exactly what breaks accounts.

After a streak: less, not more

A common mistake: after three stops, raise the lot “to win it back”. That turns a normal streak into a failed challenge. Do the opposite: after 2–3 stops in a row, halve the risk or end the day. The market isn’t going anywhere; your account without a plan might.

Close to the target? Don’t speed up

Another trap: 1% left to the target and you want to finish it with one big trade. If the stop hits, you roll back a week, like Mira on the chart. Finish the target with the same risk as always. The rules are the same at the start of the challenge and at the very end.

Check yourself

A strategy wins 50% of trades. Will it have a streak of 5 stops in a row?
Correct answer: Most likely yes: within 100 trades it happens most of the time. Streaks are part of any strategy’s statistics. That’s why risk is chosen so the account survives them.
After three stops in a row Mira wants to double the lot. What’s smarter?
Correct answer: Halve the risk or end the day. A streak is the time to protect the account. Lower risk or a pause stops a normal streak from turning into failure.
1% is left to the 8% target. What’s the best way to finish?
Correct answer: With the usual risk, over a few trades. The target won’t run away. A big trade at the end risks setting you back a week.

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