Trading calculators
Risk of ruin calculator
Risk of ruin is the probability that a run of losses takes the account down to a drawdown you cannot accept, within a given number of trades. It depends on the win rate, reward to risk and the share of the balance risked per trade.
- Probability of ruin
- < 0.1%
- Expectancy per trade
- +0.25R
How it is calculated
Each trade risks a fixed share of the current balance. A win adds that share times reward to risk, a loss takes the share away. The calculator goes through every sequence of wins and losses up to the number of trades and adds up the probability of those that touch the ruin level, measured from the starting balance. It is an exact count, not a simulation, so the same inputs always give the same number.
Expectancy is the average result of a trade in units of risk. At zero or below, ruin is a matter of time, and the probability climbs toward 100% as trades add up. The model treats trades as independent and the win rate as constant. Real losing streaks cluster, so the actual risk is usually higher than the estimate.