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Compounding & Risk of Ruin Calculator

Enter your win rate, reward-to-risk, and risk per trade. See how your account compounds over time — and the odds a losing streak wipes you out. The math most traders never run.

Your Edge

Expectancy Per Trade
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Projected Balance
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Growth Multiple
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Risk of Ruin*
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Median Outcome
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Expected Account Growth

💡 A positive edge compounds. A negative edge ruins you — at any risk level. Notice what happens when you drag risk-per-trade up: the projected balance rises, but so does your risk of ruin. Bigger bets grow a winning system faster and blow up a fragile one sooner. The goal isn't the biggest number — it's growth you can survive.
A projection is only as good as your real edge

Build the edge these numbers assume

This tool shows what happens if you have a win rate and reward:risk. Paldomz TradeX Pro helps you actually get there — clear BUY / SELL / STAND ASIDE signals with stop, targets and position size, so your real numbers match your plan.

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The math, explained

What is "expectancy"?

Expectancy is your average result per trade, measured in R (units of risk). Formula: (win rate × reward) − (loss rate × 1). At a 45% win rate and 2R winners: (0.45 × 2) − (0.55 × 1) = +0.35R per trade. Positive = you make money over time; negative = you lose it, no matter how you size.

What is risk of ruin?

It's the probability that a run of losses drops your account below a "ruin" level (here, a 50% drawdown from your starting balance) at some point across your trades. Even a profitable system has a non-zero risk of ruin if you risk too much per trade — which is exactly why professionals risk small, fixed amounts.

How is the projection calculated?

Growth uses geometric compounding: on a win your balance grows by (reward × risk %), on a loss it shrinks by (risk %), applied across your chosen number of trades. Risk of ruin and the median outcome come from a Monte Carlo simulation (thousands of random trade sequences) — because real results vary around the average.

Why does more risk raise BOTH growth and ruin?

Larger position sizes amplify every outcome. With a genuine edge, bigger bets compound faster — but they also deepen drawdowns, so an unlucky streak is more likely to hit your ruin level before the edge plays out. This trade-off is why position sizing matters more than entries.

*Risk of ruin is estimated via Monte Carlo simulation assuming fixed-fractional risk and independent trades; real markets have streaks and correlation, so treat it as a guide, not a promise. Educational tool only — not financial advice. Trading involves substantial risk of loss.