If you own a trading system with a 50% win rate, what's the probability of two consecutive losses? The answer is simple: 1/2 multiplied by 1/2.

That means, on average, out of every four trades, there's a high probability of experiencing two consecutive losses once. Similarly, you'll also experience two consecutive wins.

What about three consecutive losses or four consecutive losses? Can your mindset and position sizing withstand this kind of consecutive drawdown?