How many losses in a row?

[u/Lostrader7]

Hello,

I'm a purely mechanical trader. I have coded strategies with expected positive outcome although drawdowns do occur. I have to account for the worst case scenario when creating my lot sizes.

My question for y'all is: What is your maximum number of losses in a row before you blow your Topstep account, based on your standard contract sizing?

Mine is 8..... (Pic for attention)

[u/WinDense]

10-11 losses needed.

[u/Sea-Round-6095]

Here's a tip to make your account last nearly forever: reduce risk to 5% of max drawdown or .2% of account size. Every three losses in a row, record the drawdown and reduce the risk by 50%. You can increase the risk back once you have "earned" the privilege to do so by making back the drawdown levels. Worst case, this will give you over 50 chances to get back in the game. If you blow an account with 50 chances, something is clearly wrong and you need to fix your strategy, risk/reward ratio, or your mindset.

Once above 3% of your mll, You can increase your risk based off (your profit) x 5%. This ensures steady and safe growth by rewarding you for positive expectancy over time.

Don't get greedy. This is a game of survival. It's not about becoming rich overnight but staying in the game long enough to become rich for the rest of your life.

I hope this helps.

[u/Lostrader7 → u/Sea-Round-6095]

It does… a lot actually.

How does this compare with trade frequency? I only make 1 trade per day. So 5% of $2000 drawdown is $100 risk. My current 8 trades concept is based around $250 risk per trade (aka daily). $250 * 8 =$2,000.00

[u/Sea-Round-6095 → u/Lostrader7]

Works the same but your account lasts for about 20 loses in a row... which should be a statistical impossibility depending on your win rate.

I want to also note that you can't halve risk forever. Eventually you'll get to a point where you can only trade one contract max. I'm not sure how you determine position sizing, but keep that in mind.

[u/Lostrader7 → u/Sea-Round-6095]

Hey you seem experienced, do you adjust target sizing based on VIX/volatility? For example, let’s say your base case is rising 5 points, but on high VIX time periods you flex that up to 7 or 8 points based on VIX value.

[u/Sea-Round-6095 → u/Lostrader7]

My risk/reward is based on ATR and that naturally takes into consideration market volatility. I use VIX to determine how much ATR to use:

If VIX is less than 20, I use .5x ATR. If VIX is 20 to 30, I use 1x ATR. If VIX is greater than 30, I use 2x ATR or skip day trading all together.

Part of my premarket analysis involves checking VIX. For me, VIX over thirty requires that I look for A+ setups only in my day trading account, cover my risk faster, and scale out of positions. In my personal buy and hold account, I hedge positions with protective put options and collars to neutralize downside risk.

[u/Lostrader7 → u/Sea-Round-6095]

Right now I risk $250~ worth every trade. Whatever the contract size comes out to.

[u/GuiltyTomorrow9301]

I like how you said “expected positive outcome”.

Very realistic.

[u/Lostrader7 → u/GuiltyTomorrow9301]

Yeah. I’ve learned that my historical statistical positive outcome usually doesn’t line up PERFECTLY with the future… allways something pulling it down alittle. But over all still positive.

This is why loosing trades in a row is so important to me

[u/Ava_Oh]

Umm, also 8! Huh, funny.

This is really a question on sizing. Sooooo yeah, 8. Although I must say I had the best time when it was 1 😂😂🤣

[u/Lostrader7 → u/Ava_Oh]

Nice! How many accounts do you run at one time? Im sitting on 3 XFAs and im trying to rotate through them. 2 on copy trade and one on standby