Risk of ruin simulator
Your strategy, simulated 400 times. See the range of futures your risk settings actually allow.
Median outcome
$1,124.37
Unlucky run (worst 10%)
$944.26
Lucky run (best 10%)
$1,338.82
Edge per trade
+0.13R
Chance of dipping below 80% of start
1%
Chance of dipping below 50% of start
0%
Drawdown vs. gain needed to recover
| Drawdown | Gain to get back to even |
|---|---|
| −10% | +11% |
| −20% | +25% |
| −30% | +43% |
| −50% | +100% |
| −70% | +233% |
Every re-run is a fresh set of random futures with identical settings — notice how much luck alone changes the outcome. A real edge shows up as most paths drifting upward over many trades, never as one lucky path.
What this tool actually tells you
Risk of ruin is the probability of losing a defined chunk of your account given your win rate, reward-to-risk ratio and risk per trade. It's the honest counterweight to "just stay disciplined".
The result is uncomfortable on purpose. A strategy with genuinely positive expectancy can still wipe out an account, and this shows you roughly how likely that is before you find out the expensive way.
Worked example
A 45% win rate, targeting 2R per winner, risking 2% per trade, with "ruin" defined as losing half the account.
| Expectancy per trade | +0.35R |
| Average win / average loss | 2.0 / 1.0 |
| Risk per trade | 2% |
| Same system at 5% risk per trade | far higher ruin odds |
Positive expectancy, and still a real chance of a 50% drawdown — driven far more by risk per trade than by win rate.
How to read the result
- Risk per trade is the dominant lever. Halving it cuts ruin probability dramatically; nudging win rate up barely moves it.
- A positive-expectancy system is a necessary condition for surviving, not a sufficient one.
- If the number looks acceptable only at your most optimistic win rate, assume the pessimistic one is closer to reality.
Common mistakes
- Estimating win rate from twenty trades. That sample tells you almost nothing.
- Assuming the reward-to-risk ratio survives contact with slippage and spread — it usually shrinks.
- Reading positive expectancy as permission to raise risk per trade, which is exactly the move that causes ruin.
Put it into practice — risk-free
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Tools
Educational tools only — results are estimates and not financial advice. Real trading involves risk of loss; most beginners lose money.