Performance
The probability that a losing run takes out a defined share of the account.
The probability that a losing run takes out a defined share of the account. The page states the equation, the units it expects and the rounding it applies, so the result can be reproduced by hand.
A calculator gives you a number. This one feeds the next: account to risk, risk to position size, position size to the trade, and the trade to expectancy, drawdown and risk of ruin.
See the performance tools →The exponent is the number of consecutive losses you could absorb. It is where position size enters, and it dominates the result.
A 55% win rate at 1:1, risking 2% per trade — so 50 units of capital:
The strategy did not change. Position size moved ruin from negligible to better than one in eight.
Under 1% is the usual target, but the more useful reading is comparative: hold the strategy fixed, vary the risk percentage, and watch how fast the probability moves.
No. Use the level at which you would actually stop trading. Substituting a 30% drawdown for zero gives a much higher and much more honest number.
No. It makes ruin unlikely at small position sizes and quite likely at large ones. The edge sets the base; the position size sets the exponent, and the exponent dominates.
A calculator answers one question and raises the next. These are the ones this figure feeds into.
The growth-optimal fraction, and the reason most traders size well below it.
Peak-to-trough decline, and the gain required to climb back out of it.
Turn an account balance, a risk percentage and a stop distance into a size in lots, shares or contracts.
Risk of Ruin Calculator · rounding shown to the precision displayed