Calculate the probability of your account losing a given percentage based on your win rate, risk/reward ratio and risk per trade, using a Monte Carlo simulation.
For information only. Not financial advice. Always check your broker's conditions before trading.
How it works
Risk of ruin is the probability that a losing streak takes your account below a level you consider unacceptable, for example losing half your capital.
This calculator uses a deterministic Monte Carlo simulation: it repeats a sequence of trades 2000 times with your win rate, ratio and risk, and counts how often the threshold is hit. It uses a fixed seed, so the same inputs always give the same result.
How it is calculated
Each trade: equity × (1 + risk × R) if it wins, equity × (1 − risk) if it loses
Risk of ruin = ruined simulations ÷ total simulations
FAQ
Why not use a closed-form formula?
Classic formulas assume fixed-size wins and losses and a 1:1 ratio. With percentage risk and any ratio, simulation better reflects how a real trader trades.
How do I reduce my risk of ruin?
Lowering your risk per trade is the fastest way. With a positive-expectancy strategy, going from 5% to 1% per trade usually cuts the risk of ruin dramatically.
Which threshold should I use?
If you trade with a prop firm, use its maximum drawdown (for example, 10%). For your own account, the level at which you would stop trading.
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