Risk of ruin calculator for traders
Simulate 10,000 sequences of trades from your win rate, reward to risk and risk per trade, and see how often the account falls to the level you call ruin.
Last updated: · By Forexuro Desk · Editorial policy
Free on Telegram. Join the free Forexuro Telegram channel for daily gold and forex updates, then size each trade with this calculator.
Free, opens TelegramHow the simulation works
Each simulated trade wins with your chosen probability. A win adds risk × reward to the balance and a loss removes the risk, compounding on the current balance just as percentage risk does in real trading. The calculator runs 10,000 sequences of the chosen length and counts how many fell to your ruin level. It uses a fixed random seed, so the same inputs always give the same answer.
The table underneath repeats the test at 0.5% to 5% risk per trade with fewer runs, which shows how quickly ruin rises with size even when the edge stays the same.
What it can and cannot tell you
The model assumes every trade is independent and that your win rate and payoff stay constant. Real trading has streaks, changing conditions, costs, slippage and gaps, so treat the result as a guide to how sensitive your account is to size, not a forecast. Use realistic inputs from a large sample of your own trades.
A classic shortcut
For a 1:1 payoff, a textbook approximation is ((1 − edge) ÷ (1 + edge)) to the power of the number of losing bets your ruin budget allows. At a 55% win rate the edge is 0.10. If you can lose 20 bets before ruin, the risk is about 1.8%; with only 10, about 13.4%. See risk of ruin in the glossary.
Using trading signals? Each Forexuro signal gives an entry, stop and targets, so you can plug them straight into this calculator. See the forex signals, the gold signals and the daily notes on the free Telegram channel.
Related tools and guides
- Expectancy calculator
- Drawdown recovery calculator
- Risk per trade calculator
- Risk of ruin (glossary)
- Drawdown (glossary)
- All free trading tools
Frequently asked questions
What is a safe risk of ruin?
Most traders aim for a figure close to zero. Lowering risk per trade is the most reliable way to get there.
Why is ruin not 0% with a positive edge?
Losing streaks happen randomly. With large size a streak can reach your ruin level before the edge has time to work.
Does this include costs?
No. Reduce your average win slightly to allow for spreads, commission and swaps.
Why does the answer not change on every click?
The simulation uses a fixed seed so results are repeatable.
Calculators are for education and planning. They do not account for your broker's spread, commission, swap or contract terms. Trading forex and CFDs carries a high risk of losing money. Read our risk disclosure.