Variance, and why six losses mean nothing

The Math of an Edge

A coin flips heads six times fairly often

Even a genuinely good strategy produces long losing runs. With a 40% win rate, five losses in a row happens roughly one stretch in thirteen — not rare, not a sign of anything. The trader who abandons a working system on a losing streak and the one who doubles their size after a winning streak are making the same mistake: reading noise as signal. Variance is not bad luck, it is the normal texture of any process with an uncertain outcome.