If you lose the wager, you add the amount staked to the end of the sequence. Hence, your new sequence will be 1,2,3,4. After the initial bet, the process repeats itself until you clear the numbers on the sequence. You stake a combined amount of the last and first numbers for each subsequent wager. Hence, in the next bet, you would stake 1 + 4 ($5). However, if you win the first time and two remain in the sequence, you stake that number. If you win the wager, the cycle ends, and you can start over again with the original sequence or create a new sequence. The sequence is simple when you are on a winning streak since you can complete the sequence with two or three rounds. On a losing streak, the sequence becomes long.
Using the above example on a losing streak, your initial sequence of 1,2,3 will become 1,2,3,4 since you add the bet amount to the end of the sequence. The next bet would be $5. If you win, you remove the 1 and 4 from the sequence. With 2 and 3 remaining in the sequence, you stake $5. If you lose, the five is added to the sequence making it 2,3,5. The required stake is $7 (2 + 5) for the next round, and if you win, the numbers will be crossed off. If you win the remaining $3, the cycle ends. From the example, the total losing bets are $9, while the total winning bets are $15. That means your total winning is $6, equal to the sum of the original 1,2,3 sequence.