Losing Streaks / Chain Losers -_-'''

science_trader is right, that 1% means your 9 losses in a row can happen on average once every hundred trades. thats pretty often I would've thought.

also that assumes an even distribution which trading systems rarely exhibit. you refer to losing streaks but streaks actually refer to a situation where series of losers (or winners) are regularly a greater length than would be expected, or happen more frequently than would be expected (if random). You can only suspect that 9 losers in a row is unexpected for your system if it happens twice in 100 trades. but really you will need a lot more trades than that.
 
Quote from Remiraz:

"...Is there like anyway to avoid losing streaks or its like part and parcel of trading like? Whats the max number of losers you guys experienced before in your trading career? I'm tweaking my position size so the next 9-in-a-row-loser don't give me a heart attack. :eek:
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When you have a losing streak, it's because you are doing something wrong. Most of the time it's either (a) chasing too late with too tight of stop, or (b) your bias is wrong.
 
You realize of course with the numbers you posted you have no expectancy of a profit over time.

E = (1.5 * .4) - (1.0 * .6)
E = .6 - .6 or 0

If you trade this system out over 500 trades you'll also see 12 losers in a row at some time with a greater than 99% certainty.

Seems time to get back to work and build a better mousetrap.
 
Quote from moneymoneymoney:


If you trade this system out over 500 trades you'll also see 12 losers in a row at some time with a greater than 99% certainty.

Seems time to get back to work and build a better mousetrap.
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Hmmmm....how did you arrive at this figure?

Thanks all for your input, keep it coming. Do you guys tweak your systems so as to avoid losing streaks? Whats the longest streaks you guys experienced? How do you know to continue trading or give up?

Quote from Thunderdog:

If I may offer an opinion. Assuming your method is still viable, you have a judgment call to make: to continue using your method "as is," or to adjust it in such a way that it generates fewer, and presumably more reliable, signals. The trade-off, of course, is that you will more than just occasionally filter out some fairly decent moves in your effort to enhance signal quality. That's just the way it goes, all else being equal. I'm sure you know that.

So you have to decide what is more important to you going forward: to catch most of the "good" moves and risk catching a lot of potentially debilitating crap along the way, or risk missing some important moves in an effort to enhance the reliability of your method. Retrospectively, it is always an easy call to make assuming you have nerves of steel. Going forward, however, it is always far more murky. Personally, I favor reliability because I simply do not have the intestinal fortitude to be casual about many losses in a row. It is just not in me. I would revert to serious navel gazing if that were to occur. Turning this potential weakness of mine into a positive, I find it easier to leverage on a really good setup if I am justifiably confident about my method's overall reliability. But that's just me and my opinion.

Of course, I will be the first to agree that this summer has been fairly "challenging" to date insofar as the indexes are concerned.
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Hmmmm...how do you improve the quality of your signals? I mostly do currencies like the Euro. Since I use tight stops, one area where chain losers are likely is during tight whipsaw ranges. Any idea how to filter those? I don't mind missing good trades, i'll rather not experience another 9-in-a-row losing streak. :D
 
Some of you guys must have frikkin great edges if 12 losers in a row is enough to make you rework your systems. Must be nice.

12 is not that rare for me. I don't like it, but I deal with it by using small positions. It won't wipe me out.
 
Quote from Ricter:

Some of you guys must have frikkin great edges if 12 losers in a row is enough to make you rework your systems. Must be nice.

12 is not that rare for me. I don't like it, but I deal with it by using small positions. It won't wipe me out.
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u scale down your position size as you take losers?
 
Quote from Remiraz:

I just came out of my 9 loser in a row streak at the beginning of the week. Placing the 10th trade was a major psychological struggle. Thankfully, it was a winner and my system has been back on track since then.

I'm using like 1:1.5 risk:reward ratio intraday trading so its like around 55-60% losers while the other 40-45% are winners which I might trail to 2-3 times reward ratio if it gets trendy.

0.6^9 = 0.01
Woah, it was a 1% chance that I got stuck in that streak. -_-'''

To further aggravate the problem I just experienced a 5 loser in a row streak the week before.

Is there like anyway to avoid losing streaks or its like part and parcel of trading like? Whats the max number of losers you guys experienced before in your trading career? I'm tweaking my position size so the next 9-in-a-row-loser don't give me a heart attack. :eek:
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With 9 losers in a row streak you should maybe use a coin instead of your system?
 
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