Risk of ruin.
If I keep trading this exact edge, what is the chance the drawdown limit ever gets me?
Run it on your own numbers.
Every figure comes from what you type, and the formula behind the answer is printed under it.
Risk of ruin
If I keep trading this exact edge, what is the chance the drawdown limit ever gets me?
Chance of ever hitting the limit
0.7%
A deterministic model, not a prediction or measured data: 44 simulated equity paths over 90 trades from your inputs, 0 of them hitting the limit here. The bright line is the exact expected value.
The exact gambler's ruin probability over an unlimited number of trades: fixed win rate and R multiple, fixed dollar risk per trade, independent trades. At zero or negative expectancy the answer is always 100 percent. Halving your risk squares this probability, which is the whole argument for small size.
How it is computed
Each trade either wins your reward-to-risk in R or loses one R, at your win rate. The calculator solves the classic gambler's ruin equation for that walk exactly, then raises the solution to the number of full-risk losses your drawdown room holds: 10 percent of room at 1 percent risk is ten units. The result is the probability of ever using up the room if you keep trading the same numbers, not the chance over any fixed horizon.
The model assumes a fixed dollar risk per trade rather than compounding, and independent trades. At zero or negative expectancy the answer is always 100 percent, because a walk with no upward drift revisits every depth eventually.
Runs in your browser over the numbers you type. Nothing is stored, nothing is sent anywhere, and no result is a recommendation or financial advice.
Asked about this calculator.
Short answers in the same plain arithmetic the calculator uses.
How is this different from the pass probability calculator?
Pass probability simulates one challenge against a target and a clock. Risk of ruin ignores the target entirely and asks the longer question: trading this edge indefinitely, does the drawdown limit ever get hit? The two together price both ends of an evaluation.
Why does halving my risk help so much?
Halving the risk per trade doubles the number of losses the same room survives, which squares the ruin probability. A 20 percent ruin at 1 percent risk becomes 4 percent at half a percent. No other input moves the figure that hard.
My expectancy is positive. Why is my ruin not zero?
A positive edge makes ruin unlikely, not impossible. Losing streaks long enough to exhaust the room still occur at their natural frequency, and the calculator prices exactly that frequency. The way to push it toward zero is more room per loss, which means smaller size.
This tool provides an indicative comparison of spreads and estimated execution costs based on periodic snapshots from connected data feeds and normalized trade assumptions. Displayed values are not tradable quotes and may differ from prices available on any provider's live accounts. Spreads vary by account type, server, liquidity conditions, and time of day. Competitor names and marks belong to their respective owners; no affiliation or endorsement is implied. The "Average Prop Firm" benchmark is a computed composite of sampled competitor feeds, not the published pricing of any specific firm. Cost estimates use a normalized trade scenario and do not constitute financial advice or a prediction of trading results.