finance/calculator
Risk of Ruin Calculator - Free & Instant | Smocky
The chance a trade closes as a winner rather than at the Stop.
The size of a winning trade as a multiple of the Risk budget.
The share of current equity risked on each trade. It compounds as equity moves.
The decline from starting equity at which you consider the account ruined.
The number of trades in each simulated Trade sequence, up to 2000.
This is a statistical model, not a recommendation. It assumes two outcomes per trade, independent and identically distributed, fixed-fractional sizing, and no fees or slippage. It runs 10,000 seeded Trade sequences, so the same inputs always return the same figures.
Frequently asked questions
Why does the simulated Risk of ruin differ from the Closed-form estimate?
The simulation applies fixed-fractional sizing, so the Risk budget compounds with the account and the Horizon is finite. The Closed-form estimate assumes fixed-unit stakes and an unbounded Horizon, so it answers a slightly different question and is shown only as a sanity check.
Why can a losing account never quite reach −100% here?
Each trade risks a percentage of current equity, not a fixed amount, so equity is multiplied by a factor below 1 on every loss and approaches zero without touching it. That is why the Ruin threshold matters: it sets the drawdown, such as −50%, at which you would call the account ruined.
How precise is the Risk of ruin figure?
It is the share of 10,000 simulated Trade sequences that reached Ruin, run from a fixed seed so the same inputs always give the same number. Expect roughly ±1 percentage point of sampling error around the true value.