How deep a losing streak should an EA survive, and how to tell when it is really broken
- Every system that genuinely makes money has losing periods. MindCore's 10-year test has a maximum drawdown of 25.69% and recovered to a new high 27 times out of 27.
- A system that wins about 43% of trades will see 14–15 losses in a row as a normal statistical event over thousands of trades.
- Most people switch an EA off near the bottom of a drawdown and miss the recovery.
- Decide whether a system is really broken with rules written in advance, not with how the red numbers feel.
What drawdown means
Drawdown is how far the account falls from its previous peak, as a percentage. If the account rose to $1,000, fell to $800 and then climbed again, that period was a 20% drawdown.
Two things matter: how deep it goes and how long it takes to reach a new high. Measure it on equity, not only balance, because some EAs hide losses in trades that are still open. More on that in How to read an EA backtest report.
MindCore's real numbers
From the Standard version test, February 2017 to September 2026, 3,662 trades, $500 starting balance, 260-point spread, 0.75% risk per trade:
| Maximum drawdown | 25.69% |
| Recoveries to a new high | 27 out of 27 |
| Winning trades | 43% |
| Profit factor | 2.00 |
Split by market condition, the drawdown inside each period varies a lot:
| Period | Market | Max drawdown in period |
|---|---|---|
| Mar–Nov 2022 | Slow bear market, Fed hiking | 20.1% |
| Dec 2024–Sep 2026 | Current uptrend | 18.4% |
| All of 2023 | High rates all year | 18.1% |
| Feb–Apr 2020 | COVID | 14.1% |
| Feb 2022 | Russia invades Ukraine | 11.4% |
| Jan–Feb 2026 | Gold fell $397 in one hour | 1.6% |
Even in the strong uptrend where the system earned the most, there was a drawdown of almost 20% along the way. Full data is on the results page.
How many losses in a row is normal?
If a system wins about 43% of trades, each trade has roughly a 57% chance of losing. Simple maths says that over thousands of trades the longest losing streak you should expect is about 14–15 trades. Not because the system is broken, but because that is how probability works.
= log(3,662) ÷ log(1 ÷ 0.57) ≈ 14.6 trades
At 0.75% risk per trade, 15 losses in a row ≈ 10.7% off the balance
A system claiming "never more than 3 losses in a row" over thousands of trades usually hides losses by refusing to close trades, which is far more dangerous.
Why most people switch an EA off at the wrong time
The most common pattern: start right after the system has had a good run, then meet a normal drawdown. After the 8th to 10th loss in a row, switch it off — usually close to the bottom of that period — and miss the recovery.
The problem is not the system. It is not knowing in advance what a normal drawdown looks like. Someone who knows they may see 14 losses in a row does not panic at number 10.
Rules for "really broken", set before you start
Write these down on day one and follow them, instead of deciding while the numbers are red:
- Drawdown clearly beyond the record, for example about 1.5 times the maximum drawdown in testing. If the deepest was 25% and you are at 40%, stop and investigate.
- A losing streak far longer than the maths suggests, for example more than 20 in a row for a system that wins about 43%.
- The system stops following its own rules, such as a trade without a stop loss, unusual frequency, or the wrong position size. Stop immediately; no other rule needed.
- Your costs changed, for example your account's spread widened a lot, which eats profit directly. See how to check it in Account type matters more than the broker's name.
If none of these are triggered, you are inside a kind of drawdown the system has been through before.
Size your capital and risk to survive drawdowns
- Choose a position size where the historical maximum drawdown is a number you can genuinely live with, financially and emotionally.
- Use money you will not need to withdraw during that time. Withdrawing in the middle of a drawdown is what turns a temporary loss into a permanent one.
- See sizing by balance in What lot size for a $500 gold account and the position size calculator.
Notes
- Figures come from Strategy Tester backtests. Live results can differ with spread, slippage and future market conditions.
- Recovering every time in the past does not guarantee recovering every time in the future. That is why stop rules must be set in advance.
This article is for education only and is not investment advice. Trading gold and CFDs carries a high risk and you may lose all your capital. Past results do not guarantee future results.
