Risk of Ruin Calculator — Monte-Carlo Position-Sizing Simulator

Tools / Risk of Ruin Calculator

Risk of Ruin Calculator

A Monte-Carlo simulator: map your probability of ruin, drawdown and the Kelly-optimal risk across any win rate and risk-per-trade. Runs entirely in your browser.

HOW TO USE IT
  1. Enter your starting capital.
  2. Set the risk-per-trade range for the Y axis. The heatmap sweeps across this range so you can compare risk levels side by side rather than testing one at a time.
  3. Set your risk-to-reward ratio. Use the ratio you genuinely achieve on average — if your targets are 2R but you routinely close at 1R, enter the real figure or the output will flatter you.
  4. Set the number of trades to simulate. This is your horizon: a few hundred trades represents months of activity for most people.
  5. Set the ruin threshold — the percentage of capital lost at which you would consider the account finished. Many use 50%, because recovering from that requires a 100% gain.
  6. Set simulations per cell, then read the heatmap. Each cell runs that many random sequences and shows how often ruin occurred at that combination of win rate and risk.
How to read the result. Green means ruin was rare across the simulations; red means it was common. The value of this tool is seeing how sharply risk of ruin climbs as risk-per-trade rises — the jump from 2% to 5% is far bigger than most people expect, even with an identical win rate. It is a Monte-Carlo model of randomness, not a prediction of your results: real trading adds slippage, correlated positions and human decisions.
Educational tool — not financial advice. Prefer it automated? FibScanner applies these levels across 293 markets for you.