Position size and the chance of hitting your drawdown limit
0.03%
chance of eventually losing 50% of the account, risking 1% per trade — that is 50 full losses of cushion.
| Risk per trade | Losses of cushion | Chance of ruin |
|---|---|---|
| 0.25% | 200 | <0.01% |
| 0.5% | 100 | <0.01% |
| 1% | 50 | 0.03% |
| 2% | 25 | 1.62% |
| 3% | 17 | 6.40% |
| 5% | 10 | 19.21% |
Doubling the size does not double the risk of ruin. It halves the number of losses the account can absorb, and the chance of ruin is roughly squared in the other direction — so it moves far faster than the position size does.
Doubling the position size doubles the expected result per trade. It does not double the chance of ruin — it moves it much faster than that, because it halves the number of losses the account can absorb.
The estimate treats the account as a random walk that gains the reward on a win and loses one unit on a loss, and asks how likely it is to ever fall through the floor you set. At a reward:risk of 1 it reduces exactly to the classic gambler's ruin formula, which is how the approximation is checked in the tests.
The win rate and reward:risk are your assumptions, not ours. If you enter a combination whose expected value is not positive, the answer is 100% — that is arithmetic, not a forecast.
What risk:reward bands are traders actually reporting, and how did those trades end?
Report a trade you closed
Style
Direction
Signal
Pair
Risk:reward
How it ended
Still to pick: Style, Direction, Signal, Pair, Risk:reward
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This is a calculation, not advice. It takes the numbers you enter as given and reports what follows from them.