Skip to main content
TradeCalc
Advertisement
ForexStocksCryptoFuturesFree

Risk of Ruin Calculator — Probability of Blowing Your Account

The risk of ruin calculator computes the mathematical probability that your trading account will hit a catastrophic loss level given your strategy's win rate and per-trade risk. Prop firm traders use this to ensure their strategy stays within maximum drawdown rules. Retail traders use it to verify their risk settings produce a sustainable edge. A strategy with a 50% win rate and 2% risk per trade has a near-zero risk of ruin — but the same strategy at 5% risk per trade has a dangerously high probability of account blowup over time.

Updated August 7, 2026

Risk of Ruin CalculatorResults update instantly
%

e.g. 1.5 means risk 1 to make 1.5

%
%

Prop firm max DD or personal limit

Risk Analysis

Risk of Ruin

0.00%

Edge Per Trade

+37.50%

EV per $100 Risked

+$37.50

✓ Excellent — near-zero ruin probability

Formula Used

Risk of Ruin = ((1 - Edge) / (1 + Edge)) ^ (Ruin Level / Risk Per Trade)

How to Use the Risk of Ruin Calculator — Step by Step

  1. 1

    Enter your win rate

    Input your strategy's historical win rate as a percentage. Be honest — use real backtest or live trading data, not optimistic estimates.

  2. 2

    Enter your average risk/reward

    Input the average R:R ratio of your trades. If you risk 1 to make 1.5, enter 1.5.

  3. 3

    Enter risk per trade

    Type the percentage of your account you risk on each trade (e.g. 1 for 1%, 2 for 2%).

  4. 4

    Set your ruin level

    Enter the drawdown percentage that would end your trading (e.g. 10% for a prop firm challenge, 50% for personal account ruin).

  5. 5

    Read your risk of ruin

    The result shows the probability (%) of hitting your ruin level. Below 1% is safe. Above 5% means your risk settings need adjustment.

About the Risk of Ruin Calculator

The risk of ruin calculator computes the mathematical probability that your trading account will hit a catastrophic loss level given your strategy's win rate and per-trade risk. Prop firm traders use this to ensure their strategy stays within maximum drawdown rules. Retail traders use it to verify their risk settings produce a sustainable edge. A strategy with a 50% win rate and 2% risk per trade has a near-zero risk of ruin — but the same strategy at 5% risk per trade has a dangerously high probability of account blowup over time.

This free risk of ruin calculator works directly in your browser — no download, no registration, and no delay. All calculations are performed client-side, so your trading data is never transmitted to a server.

The formula used is: Risk of Ruin = ((1 - Edge) / (1 + Edge)) ^ (Ruin Level / Risk Per Trade). This is the same formula used by professional traders and institutional risk managers worldwide.

Supported asset classes include: Forex, Stocks, Crypto, Futures. Each asset class applies the correct unit conventions so results are always accurate regardless of the market you are trading.

Risk of Ruin Calculator — Frequently Asked Questions

Q.What is risk of ruin in trading?

Risk of ruin is the probability that a trading strategy will lose a defined percentage of capital before reaching a profit target. A strategy with high risk per trade and a low win rate has a much higher risk of ruin than a conservative strategy, even if both are theoretically profitable.

Q.What risk of ruin percentage is acceptable?

Professional traders target a risk of ruin below 1%. Prop firm traders should target below 0.5% since failing a challenge is costly. Above 5% means your current risk settings are unsustainable over a large sample of trades.

Q.How do prop firm traders use risk of ruin?

Prop firm challenges (FTMO, MyForexFunds, etc.) have a maximum drawdown rule — usually 5–10%. Traders use risk of ruin to verify that their risk per trade and win rate combination produces a near-zero probability of hitting that drawdown limit during normal trading.

Q.How can I reduce my risk of ruin?

Lower your risk per trade (the single most effective lever), improve your win rate through better strategy selection and execution, improve your average R:R ratio, and ensure you have a genuine statistical edge (win rate × avg win > loss rate × avg loss).

Q.What win rate do I need to have zero risk of ruin?

There is no win rate that guarantees zero risk of ruin at any positive risk per trade — probability theory shows even a 90% win rate system with 2% risk has a non-zero ruin probability. However, you can make ruin statistically negligible. At 55% win rate with 1:2 R:R and 1% risk per trade, the risk of ruin drops below 0.1%. Reducing risk per trade from 2% to 1% cuts ruin probability dramatically.

More Forex Calculators

Risk / Reward Calculator

Calculate your risk-to-reward ratio for any trade setup. Enter entry, stop loss, and take profit levels to see your R:R ratio and win rate needed to be profitable.

ForexStocksCryptoFutures

Drawdown Calculator

Calculate maximum drawdown from trading losses and see how much return you need to recover. Essential risk management tool for all traders.

ForexStocksCryptoFutures

Win Rate Calculator

Calculate the minimum win rate needed to be profitable at any risk/reward ratio. See your edge, expected value, and break-even win rate for your trading strategy.

ForexStocksCryptoFutures

Consistency Calculator

Calculate your consistency score for prop firm challenges. Check if your best trading day exceeds the allowed percentage of total profits for FTMO, MyForexFunds, and other prop firms.

ForexStocksCryptoFutures
Advertisement