Risk of Ruin Calculator

Risk of ruin is the chance that a run of losses takes your account down to a level you can't recover from or aren't allowed to trade below. Here you choose that level, for example a 30% drawdown from the starting balance or a prop firm’s maximum loss.

This calculator simulates your trading 5,000 times. Each run plays your number of trades, wins each trade with your win rate, and risks your chosen percentage of the current balance. The result is the share of runs that hit the ruin level. The common closed-form formulas assume a fixed dollar risk and an unlimited number of trades, which doesn't match percentage sizing over a set number of trades.

There's no standard number. It depends on what ruin means for you: losing a funded account you can buy again is different from losing savings. Use the position size table to see how fast the risk falls as you cut the size per trade, and pick a level you could live with.

Because losses cluster. Even with a positive edge, the median longest losing streak in the default example is 9 trades in a row, and a few runs get much longer streaks. If your size is large, one of those streaks can hit the ruin level before the edge has time to show.

Yes, for the maximum loss rule. Set the ruin level to the firm’s maximum loss and the risk per trade to your sizing. The model measures drawdown from the starting balance, so it doesn't cover trailing drawdowns or daily loss limits. Check those against the firm’s own rules.