Risk of ruin calculator
How likely are you to lose half your account with your current strategy? Monte Carlo simulation on your real parameters.
3000 Monte Carlo simulations. R = multiple of your risk per trade (average loss of 1 R = you lose exactly what you risked).
Then journal every trade and track your real risk in PipBook.
Try PipBook for freeFrequently asked questions
What is risk of ruin?+
It's the probability that your account reaches a loss level you can't recover from (here, the drawdown threshold you pick). Even a winning strategy can carry a high risk of ruin if the risk per trade is too large.
How do I reduce my risk of ruin?+
Three levers: lower the risk per trade (the most effective), improve the reward/risk ratio, or improve the win rate. Going from 3% to 1% risk per trade often reduces the probability of ruin dramatically.
Why a Monte Carlo simulation rather than a formula?+
Closed-form formulas assume symmetric wins and losses. The simulation replays thousands of trade sequences with your real parameters — including an asymmetric reward/risk ratio — and simply counts how many end in ruin.