Risk of Ruin Calculator

Statistically model the probability of losing your entire trading account given your strategy parameters.

Win Rate (%)

Risk per Trade (%)

Payoff Ratio (Avg Win / Avg Loss)

Ruin Threshold (%)

2.3%

Probability of Ruin

+0.10

Edge per Trade

+0.25R

Expectancy

SAFE

Verdict

What is Risk of Ruin?

Risk of Ruin (RoR) is the probability that a trader will lose a specified percentage of their account before reaching a profit target. It combines win rate, payoff ratio, and position sizing into one number.

The formula used: RoR = ((1-Edge)/(1+Edge))^N where N = account units / risk per trade and Edge = (WinRate × Payoff - LossRate) / 1.

A RoR below 5% is generally considered acceptable. Above 20% signals dangerous position sizing or an unprofitable strategy.