How many trades before a number means anything, and how to tell a losing run from a broken method. This lesson covers: Ten trades tell you nothing, After ten trades, Drawdowns you should expect, Six losses in a row, When something is genuinely wrong, Diagnosing a decline, What a useful record contains, The most useful field, Review on a schedule, not on a loss, Put it together.
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Sample size is the single most under-appreciated idea in trading performance. Sequences that look decisive over ten or twenty trades are routinely produced by chance, in both directions.
This cuts both ways: early success is arguably more dangerous than early failure, because it tends to be followed by an increase in position size just as variance reverts.
Low hundreds for a reasonable read on expectancy. Below about fifty you are mostly measuring variance rather than method.
Not from a losing run. Look for a sustained change in average win, average loss or expectancy across a hundred-plus trades — and check your own execution first.
Entry, stop, target, size, R-multiple result, your grade for the setup, and whether the plan was followed. The last field is the one most often omitted and the most useful.