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Estimate the probability of hitting a 70% drawdown threshold based on your win rate, risk per trade, reward ratio, and trade count.
Risk of Ruin: —
Average Ending Balance: —
Median Ending Balance: —
Break-even Win Rate: —
Insight: —
Risk of ruin is the chance that a trading strategy will suffer a severe enough drawdown to become difficult to recover from. In this calculator, ruin means the account falls 70% from the starting balance during the selected number of trades.
That is different from a simple losing trade. A strategy can survive a few losses and still be healthy. Risk of ruin is about whether the strategy can survive a bad streak, not just whether it can win once.
This tool uses a Monte Carlo-style simulation with a fixed seed so the same inputs always produce the same output. It simulates many possible trade paths based on your win rate, risk per trade, reward ratio, and number of trades.
The result shows how often the account crosses the ruin threshold, along with how the balance path can look over time.
Even a strategy with a decent win rate can fail if risk per trade is too high. Losing streaks happen. The real question is whether your system can survive them.
Professional traders focus on survival first, because you cannot profit from a strategy that no longer exists.
One of the biggest mistakes traders make is increasing risk after a few wins. Confidence rises, discipline drops, and the account gets exposed to a much larger drawdown than intended.
This calculator helps keep the focus on survival, not excitement. It is not about predicting the future — it is about understanding the risk behind your strategy.
This version uses a fixed seed so the same inputs always produce the same output. That makes the result stable and easier to compare.
A 0% result usually means your strategy is conservative enough that none of the simulated paths reached the ruin threshold.
Lower is better. Many traders try to keep it below 5–10%, but the right level depends on the strategy and the trader’s tolerance.
No. Risk per trade often matters more. A high win rate strategy can still fail if losses are too large.
You can reduce risk by lowering position size, improving reward ratio, and avoiding overtrading.
Disclaimer: The calculators on this website are provided for informational and educational purposes only. All results are estimates based on the values entered and do not constitute financial, investment, or trading advice. Always conduct your own research before making financial decisions.