Risk of Ruin Calculator
Every trader cares about the upside. This tool asks the darker question: what's the probability your drawdown gets hit first? Closed-form formula, instant answer.
Your Parameters
Enter your realistic edge and the challenge drawdown. Results update instantly.
Heatmap: Win Rate × Risk per Trade
RoR % across the entire parameter grid, holding your current R:R and drawdown constant. Cells are coloured by severity. Your current setting is highlighted.
How Risk per Trade Changes Your Ruin Probability
Your win rate and R:R are fixed. We sweep risk per trade from 0.25% to 5% and plot the resulting RoR. This is the single most consequential decision in challenge trading.
How the Formula Works
We use Ralph Vince's closed-form approximation — fast, accurate, and widely validated in quantitative trading research.
Advantage (A)
Your edge per trade divided by the standard deviation of per-trade outcomes. If A is ≤ 0, you have no edge and RoR is always 100% — no position size will save you.
Units (U)
How many full risk-trades you can lose before busting = max drawdown ÷ risk per trade. Doubling U squares your survival odds; doubling risk per trade halves U.
RoR formula
RoR = ((1−A)/(1+A))U. Tiny changes in risk per trade produce huge shifts in RoR — the function is exponential in U, not linear.
Why traders lose
Most blown accounts aren't from a bad edge. They're from good edges ruined by oversized risk. A 55%/2:1 trader risking 3% has 8× the bust probability of the same trader risking 1%.
Know your RoR? Find the firm with the drawdown rules that fit your edge.