Intermediate Tool
Risk of Ruin Calculator
Even profitable traders can blow up. This Monte-Carlo simulation estimates the probability of a catastrophic drawdown given your edge and sizing.
Inputs
Expectancy
37.50% per trade
Monte Carlo · 2,000 runs
Probability of ruin
0.0%
safe zone
Each line is one simulated trader with your edge. The red zone is a 50% drawdown.
Interpretation
Anything above 5% risk of ruin should trigger a review of either your edge or your sizing. Professional money managers typically operate below 1%.
Read the full lesson: Risk of Ruin: Calculating Your Survival Probability.