Risk-of-Ruin calculator: how likely a total loss is
Even with an edge, a losing streak can wipe out your account if you risk too much per trade. This calculator estimates the probability of losing all your capital, within a simplified model.
Enter your win rate and the number of risk units your capital represents (capital divided by risk per trade). Important: this model assumes, for simplicity, equal win and loss sizes per trade and a fixed stake. It shows a principle, not an exact forecast.
Calculate Risk of Ruin
Why Risk of Ruin matters
Limit risk per trade
The calculator shows how strongly smaller risk per trade lowers the probability of ruin. More risk units mean a noticeably safer chance of surviving.
Survival first
Even a good edge is worthless if an ordinary losing streak wipes you out. Risk of Ruin makes it tangible why protecting capital comes before maximum return.
Plan for losing streaks
Losing streaks are part of it, even with a positive expectancy. The calculator helps you understand how to choose your risk so that you can ride them out.
Discipline over hope
Risk of Ruin replaces hope with a number. It is exactly this level-headed, rule-based view of risk that FlowTrader encourages.
Common questions about Risk of Ruin
Risk of Ruin is the probability of losing your trading capital completely. It depends on your edge, that is your win rate, and on how much you risk per trade. The smaller your risk per trade relative to your capital, the lower the probability of a total loss.
It is a simplified model that assumes equal win and loss sizes per trade and a fixed stake. It shows the principle and the order of magnitude, but it is not an exact prediction. Real results depend on the full distribution of your wins and losses.
Above all by risking less per trade, that is by splitting your capital into more risk units, and by improving your edge. Even the step from a high to a moderate risk per trade often lowers the probability of a total loss drastically.