Risk of Ruin Calculator
Simulate thousands of trade sequences to see how likely your strategy is to hit a drawdown limit at your current risk per trade.
What is risk of ruin?
Risk of ruin is the probability that a run of losses takes your account down to a level you cannot accept, whether that is a prop firm's maximum drawdown or a personal limit. Even a profitable strategy can hit that level if the risk per trade is too high.
Expectancy (R) = Win rate × Reward-to-risk − Loss rate
This calculator runs 4,000 random simulations of your win rate, reward-to-risk and risk per trade, compounding each result, and counts how many sequences reach your drawdown limit within the number of trades you choose.
How risk per trade changes everything
With a 45% win rate and 2R winners, risking 1% per trade rarely produces a 20% drawdown over 300 trades. Risking 3% with the same edge makes it far more likely. Lowering risk is usually the fastest way to cut your risk of ruin without changing your strategy.
Drawdown from start vs. from peak
Choose 'from starting balance' for a static limit, as used in many forex prop firm challenges. Choose 'from peak' for a trailing limit, as used in many futures evaluations, where the drawdown follows your highest balance.
Use your real numbers
Simulations are only as good as their inputs. Clarity Tracking calculates your actual win rate, average R and drawdown from your synced trades, so you can run this calculator with numbers you can trust.
