LoggingTrades“There is a random distribution between wins and losses for any given set of variables that define an edge.”
— Mark Douglas, Trading in the Zone · Share this quote
Step 1: Stop the bleeding
Cut your size in half (or switch to micros) and cap your trades per day until you’ve had a green week. This isn’t punishment — it lowers the cost of being wrong while your confidence is shaky.
Step 2: Separate bad luck from bad trading
Go through every trade in the streak and mark it: did it follow your plan or not?
- Mostly followed plan — it’s probably normal variance. With a 45% win rate, runs of 6–8 losses are routine. Check how often streaks like this should happen with the risk of ruin calculator.
- Mostly broke plan — the streak is behaviour, not the market. Find the most common broken rule; that’s the fix.
Step 3: Don’t try to win it back
“If you personalize losses, you can’t trade.”
— Bruce Kovner, widely attributed, from Market Wizards · Share this quote
Trying to recover a losing week in one day is the fastest way to turn a drawdown into a blown account. The goal this week is clean execution, not P&L.
Step 4: Rebuild on process wins
Track a daily “process score”: rules followed out of rules total. Confidence comes back from seeing a column of clean days, not from one big winner.
Step 5: Scale back up in steps
Return to normal size only after one or two weeks of clean execution — and in steps, not all at once.
“The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses.”
— Ed Seykota, in Market Wizards by Jack Schwager · Share this quote
FAQ
How long do losing streaks last?
It depends on win rate. At 45–50%, streaks of 6–8 losses happen regularly over a few hundred trades even with a real edge.
Should I stop trading during a losing streak?
Reducing size and trade count is usually better than stopping entirely — you keep executing your process while risking less.