The danger of a winning streak
Five wins in a row feels like skill
After a streak it's natural to believe you've figured the market out. But five coin flips can land heads five times. A handful of trades can't tell skill from luck.
Confidence grows the stake
The usual next step is bigger positions and more trades. That's when one ordinary loss lands on the biggest stake of the run and gives back weeks of gains.
More trading, less return
A study of 66,000 US brokerage households found the most active fifth earned about 6 percentage points a year less than the market, after costs. Confidence showed up as activity, not as results.
Keep score in writing
Before each trade, write one line: why you're in, and where you'd be wrong. Afterwards, check the reason, not just the result. A win for the wrong reason is a warning, not a lesson.
Check yourself
You've won 6 trades in a row. What's the disciplined next move?
- Same size, and check why each trade worked
- Double the stake while it's working
- Stop: a loss is due now
Show the answer
Same size, and check why each trade worked — Six trades are too few to prove an edge, and past wins don't make a loss 'due'. Keep the size, keep honest notes, and let the evidence build.