Risk of ruin calculator: what are the odds your account gets cut in half?
Most accounts aren't wiped out by one trade. They bleed out from bets that were just a bit too big. Put in your numbers and see the odds of getting cut in half.
How it works: it plays out your trades 10,000 times. Each trade wins at your win rate. A loss costs your risk % of what the account has right now. A win pays that amount × your payoff. A run is "ruined" the moment the account drops to your ruin level below where it started, and it stops there. The chance of ruin is the share of the 10,000 runs that got there. The random draws come from a fixed seed, so the same inputs always give the same answer. It assumes every trade is independent and your numbers never change.
An edge doesn't save you from big bets
The default here is a system that breaks even on paper: 40% winners that pay 1.5 to 1. Risk 10% a trade and most runs still get cut in half. Why? A 10% loss takes more than a 10% gain gives back. Each loss shrinks the account, and the next win is paid on the smaller amount. Lower the risk to 1% and watch the chance fall. Then try a real edge, like 50% winners at 1.5 to 1. Big risk per trade can still sink a good system. For the full picture, see risk of ruin and how much to risk per trade.
Why it never hits zero, and why that doesn't help
If you always risk a % of what's left, the account can shrink forever without reaching $0. That's why "ruin" here is a level you pick, like down 50%. In real life, a 50% drop is ruin enough: you need a 100% gain just to get back. Most traders quit long before that. Plan for the streak that will come with the losing streak calculator, and set a daily loss limit so one bad day stays one bad day.
Make this a habit, not a one-off. Lesson 2 of our free email course is all risk: the 1% rule, where your stop goes, and the 2-loss rule. Send me the free lessons →
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