Risk of ruin calculator

How likely is a big drawdown with your risk per trade, win rate and payoff? Thousands of simulated trade sequences, run in your browser.

How it works

  1. You enter the % of your balance you risk per trade, how often you win and how many R a winner pays.
  2. The calculator plays that many trades in a random order thousands of times (a Monte Carlo simulation), compounding the balance after each trade.
  3. For each run it records the deepest fall from a peak. The probability is the share of runs that fell by your drawdown % or more.
  4. The chart shows the middle 90% of the simulated balance paths and the median path. It is a model of fixed odds, not a forecast of your results.

Frequently asked questions

What is risk of ruin in trading?

The probability that a run of losses takes your account down by a chosen amount (for example 50%, or the 10% max loss of a prop challenge) before you get the chance to recover. It depends on your risk per trade, win rate and reward-to-risk.

How does risk per trade change the odds?

Strongly. With the same win rate and payoff, going from 1% to 3% risk per trade can turn a near-zero chance of a 30% drawdown into a likely one, because losing streaks compound.

Is a 50% win rate with 1:2 R:R safe?

It has a positive expectancy (+0.5R per trade), but losing streaks of 6–8 trades still happen regularly over a few hundred trades. At 1% risk that is a 6–8% drawdown; at 5% risk it is about 30–35%.

Is this a prediction of my results?

No. Real trading does not have a fixed win rate or payoff, and trades are not independent. Use it to understand how risk size and drawdowns relate, not as a forecast.

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Educational tools and general market analysis, not financial advice. TradeRadar is not an authorised financial services provider.