Talking about the worst streak of Forex losses can be painful, but we learn important lessons from them. Although diverting too much of your attention to the biggest winning streaks might seem unnecessary. Additionally, focusing too much on your winning streaks can impair your judgement and induce excessive risk-taking.
Similarly to the losing streaks, winning streaks can be measured using three different techniques: by number, by size, and by duration.
Let’s consider an example with the following 14 trade outcomes: win, loss, loss, win, win, win, win, loss, loss, loss, win, loss, win, win. The longest uninterrupted row of losses is 4. It may look good, but if you calculate your best winning streak using only the number of trades, you miss the important stuff — how much money did it bring to your account?
The same example of 14 trades can be viewed at a different angle. The final streak of 2 wins could be much larger than the longest streak of 4 wins highlighted by the simple method based on number. For example, the final 2 wins could be worth $500 in total, while those 4 wins could be just $400 in total. This method should be preferred when analyzing abnormal balance peaks and the ability of your trading system to climb out of deep drawdowns. For a more complex approach, you also need to differentiate the streaks as measured by time.
The same streak of 2 wins near the end of the example set of trades could be 2 weeks long, while the longest streak of 4 wins could be a result of one successful day. Of course, winning $400 in a day is always better than winning $500 over 2 weeks, it is important to analyze the lengths of your streaks. The time duration of your winning streaks matter to your overall success as a Forex trader. Any incurred loss takes an emotional toll on you. Conversely, prolonged periods without losses inspire confidence in your trading strategy and make you less trigger-shy.
Looking at your long streaks of profitable trades might be lots of fun and pride, but is there any point in doing so? Knowing that your strategy is capable of producing uninterrupted sequences of purely winning positions can be useful. Such strategy, even if prone to drawdowns, will have higher probability of recovering from them. Additional boon of operating a positively streaking system, as mentioned earlier, is the morale boost it gives you, especially if you are not too experienced in Forex trading.
On the not-so-bright side, paying too much heed to your wins could give you a false idea of being invincible as a trader, which leads to risking too much and to overtrading. This can be mitigated by an impartial and unbiased view of your own trading history. Revising your trading plan should be based on a systematic approach and remain unaffected by emotions or unusually long streaks of gains.
The polls below allow you to select what your best streaks have been in terms of number, dollar amount, and duration. My own chart pattern strategy, after being analyzed in the Report Analysis tool, shows 3 profitable positions in a row as the best winning streak as measured by number of wins. However, it was worth just 5% in account balance terms, while the biggest streak by win size was worth 13% even though it consisted of only 2 trades. Both streaks were of relatively short duration, while a simple 2-win streak from 2014 lasted 6 months and was the longest one in terms of time. And how were your best winning streaks?
Best Streak by Number of Trades
Best Streak by Total Profit
Best Streak by Duration
If you have questions or if you want to share some details on the biggest streak of winners you have recorded in Forex trading, please use the commentary form below.