Risk of Ruin Calculator
A profitable system can still blow up if you size too big. This runs 8,000 Monte Carlo equity paths on your edge and counts how many hit a ruin drawdown before the edge pays off.
Why a winning system still blows up
Risk of ruin is the probability a losing streak drags your account down to a level you call "ruined" before your edge has time to compound. A positive expectancy says you win on average over infinite trades - it says nothing about surviving the next fifty.
We simulate fixed-fractional sizing: each trade risks a percentage of your currentbalance, so losses shrink your bets and wins grow them - the honest way most traders actually size. Ruin is defined as a drawdown from your starting balance, because almost nobody keeps trading a strategy after it's halved their account, whatever the math says.
The lesson is in the position-size table: the edge is identical in every row, but doubling your risk per trade can turn a 3% chance of ruin into a 40% one. Edge decides if you make money; position size decides whether you're still around to collect it.
We run this kind of survival test on every strategy before we publish it.
See the strategies that survived, and the ones that didn't.