Lesson 3 of 6 9 min read
Drawdowns and losing streaks
The math of recovery and rules to protect your account.
Recovery math
A 10% loss needs 11% to recover; a 50% loss needs 100%. Keeping drawdowns small matters more than chasing big wins.
Streaks happen
Even a solid approach with a 50% win rate will see 6+ losses in a row at some point. Plan for it in advance.
Circuit breakers
Set rules like: after 3 losses in a day, stop; after a 10% monthly drawdown, halve risk until you review.
Key takeaways
- Losses compound against you — keep them small.
- Losing streaks are normal.
- Pre-set stop-trading rules.
Exercise
Write your own daily and monthly circuit-breaker rules and pin them near your screen.
Educational content only, not financial advice. Crypto is volatile and you can lose money.