Scalping equity curves are lumpy and the streaks are normal

[Amanhasnoname]

Many traders expect a steady upward line. Real scalping results look rougher than that, even for profitable systems.

A strategy with a 55 percent win rate and equal payoffs regularly produces runs of seven or eight losses. A string of ten has a meaningful chance over a few thousand trades. Without knowing that, a normal drawdown feels like proof that something broke.

Simulating the system with random sequences of wins and losses, using the actual win rate and payoff, gives a picture of what to expect. Plot a hundred equity curves and the spread is striking.

That helps in two ways. It sets realistic expectations for drawdown depth and duration, and it provides a threshold for when behaviour falls outside the normal range, which would suggest a real change.

Without it, traders either abandon good systems too early or cling to broken ones.

A Monte Carlo test takes a few minutes in a spreadsheet.

What is the worst drawdown your system has had, relative to what simulation predicted?