Drawdown — Understanding and Surviving Losing Streaks
7/6/2026
Drawdown is the fall from your equity peak. Its cruel math: a 50 percent loss needs a 100 percent gain to break even.
Level by level
Beginner
Losing streaks are statistically NORMAL: a 50 percent win rate produces 5 losses in a row about once every 32 sequences. Plan for them before they happen.
Intermediate
Cap risk so your worst realistic streak stays survivable: at 1 percent risk, 10 straight losses is about minus 10 percent — annoying, recoverable. At 5 percent risk it's minus 40 — game over territory (see the Drawdown-Recovery calculator).
Advanced
Track max drawdown as your system's real cost; halve position size when 50 percent through your historical max — living to trade tomorrow beats being right today.
Common mistakes
- Revenge-sizing after losses to win it back
- Judging a system on 10 trades
Practise & tools
_Educational content only — not financial advice. Historical behaviour never guarantees future results._
Keep learning — free tools