Risk of Ruin Calculator
A profitable system can still blow a funded account. Enter your win rate, your average win and loss, and your risk per trade, and a Monte Carlo simulation shows the odds of hitting your drawdown, modeled against the strict trailing drawdown a real evaluation uses.
Most blown accounts aren't killed by a bad strategy; they're killed by risking too much per trade for the drawdown they're trading against. Risk of ruin is the probability that variance ends the account before your edge can pay off, simulated against the same trailing drawdown a funded evaluation actually uses.
- What it does
- Odds of hitting your drawdown
- Method
- Monte Carlo: 20,000 runs
- Inputs
- Win rate, avg win/loss, risk per trade
- Drawdown
- Trailing (ETF) or static floor
- Best for
- Sizing risk on a funded account
Try it yourself
Pick your account size to load its trailing drawdown, set your win rate and reward-to-risk, and choose your risk per trade. The tool returns the share of simulated runs that hit the drawdown, your per-trade edge, the median outcome, and what happens if you halve your risk.
of simulated runs hit the trailing drawdown before finishing.
Even with a positive +0.50R edge, a $2,000 trailing drawdown is hit in 63.0% of 150-trade runs. Variance ruins the account before the edge can compound. At 0.5% risk per trade, halving your risk to 0.25% drops the risk of ruin to about 1.4%.
| Your edge (expectancy) | +0.50 R / trade |
| Survived | 37.0% |
| At half the risk per trade | 1.4% |
| Median ending balance | $66,940 |
| Median worst drawdown | $2,045 |
Educational tool, not trading advice. It runs 20,000 random sequences of trades using the win rate and average win and loss you enter, assuming each trade is independent and those averages hold. Real trading has streaks, changing edges, fees and slippage this does not model. It does not predict your results. Futures trading carries a substantial risk of loss.
How the simulation works
There is no clean closed-form answer once the drawdown trails your peak, so the calculator simulates instead of solving. It plays out thousands of random trade sequences and counts how many end in ruin.
1. Describe your edge
Enter your win rate and your average win and loss in R: a 2R win makes twice what a 1R loss costs. Together these decide whether the system makes money over the long run, and how bumpy the ride is.
2. Set your risk and floor
Pick your account size to load its trailing max drawdown (or type your own), and choose the risk you take per trade. Trailing means the drawdown chases your highest balance, the way a funded evaluation works, so it is far less forgiving than a fixed floor.
3. Read the odds
The tool runs twenty thousand random sequences of trades and reports the share that hit the drawdown before finishing. Even a clearly profitable system can ruin most runs when risk per trade is too high for the floor.
Each run sizes every trade as a fixed fraction of the current balance, wins or loses by your average R, and tracks the drawdown from the running peak (trailing) or the start (static). The headline is simply runs that hit the drawdown ÷ total runs.
Why risk per trade matters more than you think
Two traders can run the identical system, same win rate, same reward-to-risk, the same positive edge, and one survives while the other busts, purely because of how much they risk per trade against a trailing drawdown.
| Rule | Smaller risk per trade | Double the risk per trade |
|---|---|---|
| System | 50% win rate, 2 : 1 reward-to-risk (+0.5R edge) | 50% win rate, 2 : 1 reward-to-risk (+0.5R edge) |
| Risk per trade | 0.5% of a 50K account | 1.0% of a 50K account |
| Floor | $2,000 trailing drawdown | $2,000 trailing drawdown |
| What usually happens | Survives most runs, but far from safe | Hits the drawdown in nearly every run |
Drop your risk per trade in the calculator and watch the odds fall, usually faster than you'd expect. That single lever, not a fancier strategy, is what keeps funded accounts alive.
Surviving a funded evaluation
A trailing drawdown is the reason a good system can still fail an evaluation: it chases your highest balance, so giving back a gain can end the account before your edge compounds. Knowing your risk of ruin up front lets you pick a risk per trade you can actually survive, and then size each trade to match.
Frequently asked questions
Know your odds, then trade them.
Once you've found a risk per trade you can actually survive, pick the evaluation that matches how you trade and put the plan to work on our capital.
Browse evaluationsAccount sizes and risk parameters are subject to change.
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