Risk of Ruin Calculator
What Risk of Ruin Really Measures
Risk of ruin answers a specific question: given your win rate, payoff and how much you stake each trade, what is the chance you hit your loss limit before variance works itself out. A strategy can be profitable and still have meaningful ruin risk if it stakes too much.
The classic formula compares the edge against the exposure. As risk per trade rises the exponent grows and ruin probability climbs steeply — this is why cutting stake in half often changes the outcome far more than improving win rate by a point.
The model assumes independent trades with a constant edge. Real series are serially correlated: losing streaks cluster in bad regimes, so treat this as a floor rather than a ceiling, and re-run it whenever your win rate changes.
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How it is calculated
ror = ((1 − edge) / (1 + edge)) ^ unitsror ≈ q ^ (capital / max_loss_per_trade)Assumes independent trials with constant win rate and payoff.
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Reading the number
Enter values to see a practical interpretation.
The tool uses only the inputs you set, with the formula published below.
Fees, taxes, provider rules and market movement can shift the outcome.
Reference example: 52% win rate, 1:1 payoff over 100 trades → low but non-zero ruin risk.
Scope: Best used alongside win rate, payoff ratio and average exposure.
Reviewed August 21, 2026.
Primary references: Thorp — Kelly criterion · CFTC — Risk management
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