Risk of Ruin
The probability your account never comes back. Enter your edge and your sizing — get the number most course-sellers would rather you never calculate.
Your edge & sizing
The formula
N is how many worst-case losses fit between you and your ruin threshold. Halving risk per trade doubles N — and because N sits in the exponent, that change is worth far more than any tweak to win rate. This is the arithmetic reason small position sizes keep accounts alive.
Frequently asked questions
What counts as "ruin"?
Whatever drawdown ends the game for you — the default is −50%, but many traders are done psychologically (or contractually, at a prop firm) well before zero. Set the threshold to the loss you would genuinely not come back from.
Is this an exact probability?
It is the classic gambler's-ruin approximation, assuming independent trades, a fixed edge, and fixed fractional risk. Real trading adds fat tails, correlation, and edge decay — so treat the output as a lower bound, not a guarantee.
What is the fastest way to lower my risk of ruin?
Cut risk per trade. The units-to-ruin count N sits in the exponent, so halving position size squares your survival odds ratio — an improvement no realistic win-rate gain can match.