Losing streaks in trading, and in life?

The term “losing streak” means a “streak” of a number of consecutive losses. Most strategies used in the markets, eventually go through a losing streak, maybe 5 losses in a row, maybe 15 or maybe more.

This is mainly because if there is a strategy that has a 100% win rate, more and more people will flock to it. Eventually, it will be profitable enough for big institutions to counter that strategy and take all the money from these people. Because make no mistake, trading is a zero-sum game: if you lost, somebody won and vice-versa.

You can go through a lot of emotions when going through a losing streak: the stress of losing all of your money, the anger because it seems to be happening to you only, disappointment because you’re not meeting your expectations and much more.

To cross over into the green, what I’ve found to be helpful is trying to break through it and not around it. Meaning, if your strategy is sound, you need to trust it and keep at it. But if you check around and realise that your strategy is not performing because of an inherent flaw, then and only then look to change it. Traders sometimes start to hop strategies after a few losses, and then end up losing more and more there, most of the time.

So why did I put “and in life?” in the title of the article? Because I think a “losing streak” can happen in life too: your boss shouted at you on Monday, you get sick on Tuesday, you find a bank fraud against you on Wednesday, and so on. And this is very disturbing. But like trading, I think breaking through this is the most viable option. How I like to look at it is, “With every new loss, you’re closer and closer to the wins.”

I hope you found some value and sorry I shifted from finance to motivational content randomly, I just thought I could talk about something that can help you in life too along with trading. Anyway, if you enjoyed this article, you can read more from me here. And do let me know if you want a specific topic covered. Subscribe for free to receive more posts like this every day!