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Risk of ruin calculator

The chance of hitting your max drawdown before you get anywhere, at your win rate, R:R and risk per trade. Built for prop firm limits.

45%
1 : 2.0
%
%

Risk is a fixed % of your starting balance and drawdown is measured from it, the way most prop firm max loss rules work. 10,000 simulated runs.

—chance of hitting the drawdown
Losses in a row to ruin —
Expectancy —
Finish in profit —
Median result —

What risk of ruin means

Risk of ruin is the chance that a run of losses takes your account down to a level you can't come back from. For a prop firm trader that level is simple: the max loss rule. Hit it once and the account is gone, however good your strategy is over the long run.

This calculator plays out your numbers 10,000 times, trade by trade, and counts how often the account touches your drawdown limit before the end of the run.

Why a winning strategy can still blow up

A positive expectancy only shows up over many trades. In the short run, losses cluster. At a 45% win rate, a streak of 8 losses somewhere in 200 trades is close to a coin flip. Risking 1.5% a trade with a 10% limit, that streak alone ends the challenge.

Losses in a row to ruin = Max drawdown ÷ Risk per trade

The fix is almost always the same: risk less per trade. Halving your risk roughly doubles the losing streak you can survive, while your edge stays exactly the same.

Use your real win rate

The answer is only as good as the numbers you put in. Planned win rates and R:R are usually better than real ones. Log your trades and use the win rate and average R:R you actually achieve, ideally over at least 50 trades of the same setup.

Frequently asked questions

What is a good risk of ruin?

For a funded account or a challenge, aim for under 5%. Above 20% means a normal losing streak has a real chance of ending the account, so reduce your risk per trade.

What risk per trade should I use for a prop firm challenge?

Most traders who pass risk between 0.25% and 1% per trade. With a 10% max loss, it takes 10 straight losses to fail at 1% risk, but only 5 at 2%.

How is risk of ruin calculated?

This tool runs a Monte Carlo simulation: it plays out your win rate and R:R as random trades 10,000 times and counts how many runs hit your drawdown limit. That captures losing streaks better than a single formula.

Does a higher R:R reduce risk of ruin?

Only if your win rate holds up. Higher R:R targets are usually hit less often. What protects you most is lower risk per trade and a positive expectancy based on real results.

Know your real win rate and R:R

TraderTracked works out your true win rate, average R and drawdown from every logged trade, so your risk of ruin is based on fact, not hope.

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More free tools

Prop firm challenge calculatorHow many losses you can take before failing, and how many wins it takes to pass.Open tool →Losing streak & drawdown calculatorWhat a run of losses does to your account, and how likely that streak really is.Open tool →Break-even win rate & expectancyThe win rate you need at your R:R, and what your edge is worth per trade.Open tool →

These calculators are for planning and education. They are not financial advice. Always check contract sizes, pip values and rules with your own broker or prop firm.