Calculator
Risk of ruin and drawdown recovery
A positive edge does not make ruin unlikely. Two numbers that show why size matters more than most traders think.
- Losing trades to ruin
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- A drawdown of
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- needs a gain of
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The asymmetry nobody plans for
Losses and gains are not symmetric. Down 10% needs 11.1% to get back. Down 30% needs 42.9%. Down 50% needs 100%: a doubling, from a smaller base, after the drawdown that just shook your confidence in the method. This is the arithmetic that turns a bad month into a different career.
What this model assumes
Fixed fractional size, independent trades, and a constant edge. Real trading has none of those cleanly, so treat the number as a comparison tool rather than a forecast. Its value is in the direction it moves: hold your edge constant, double your risk per trade, and watch the probability climb. That relationship is real even where the exact percentage is not.
No edge is a different problem
If the win rate and reward-to-risk you enter do not clear break-even, the calculator says ruin is certain, because it is. At negative expectancy, position size determines how long the account lasts, not whether it survives. Fixing size is not a fix for that; the expectancy calculator is where that problem is visible.
Your own numbers beat any calculator. Drop a NinjaTrader export on the Trade Lab and it works these figures out from the trades you actually took. It reads the file in your browser and nothing uploads.