Risk of Ruin Calculator - Blackswan Fx

RISK OF RUIN CALCULATOR​

The risk of ruin calculator is a sophisticated tool for calculating the probability of loss in a trading strategy.

How to calculate risk of ruin?

Input system parameters, how to calculate risk:

✔️ Win rate (%) – Win rate of your current edge 

✔️ Average Profit/Loss –  (This is your risk to reward) If your average loss is $100 and your average win is $200 then you would put 2.0 in the box

✔️ Risk per trade (%) – Percentage of capital risked per trade.

✔️ Number of trades – Sample size of trades to test 

Higher number of trades increases risk of loss and drawdown.

Drawdown calculator

What Is a Risk of ruin calulator?

A risk of ruin calculator is a tool that helps investors and forex traders understand the likelihood of losing a % capital when trading or investing in a particular financial instrument or portfolio.

 

It takes into account various risk factors such as market volatility, leverage, and position size to calculate the probability of a catastrophic loss.

WHY SHOULD I USE A RISK OF RUIN CALCULATOR?

Using a risk of ruin calculator is important for several reasons.

 

First, it can help investors and traders manage their risk effectively by providing them with a realistic assessment of the potential losses they may incur.

 

This, in turn, can help them make better decisions about position sizing, risk management, and portfolio diversification.

 

Second, a risk of ruin calculator can help traders and investors evaluate the potential risks and rewards of a particular trade or investment before committing any capital.

 

By understanding the probability of losing all their capital, traders can decide whether the potential reward justifies the risk.

Finally, a risk of ruin calculator can help traders and investors stay disciplined and focused on their long-term goals.

 

By understanding the risks involved in trading and investing, traders can avoid making impulsive decisions based on emotions, which can lead to significant losses. Instead, they can develop a consistent and disciplined approach to risk management that is aligned with their overall investment objectives.

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