Every trader has losing streaks, some of the active traders on the DayTrading.com team included. What matters is whether your account can survive them. This calculator simulates thousands of traders using your strategy to show how likely a deep drawdown is, and crucially, how much you would need to gain to recover from a loss.
Drawdown & Risk of Ruin Calculator
How hard losses are to recover, and the odds of a deep drawdown.
Results are estimates for information only, not financial advice. Trading on leverage carries a high risk of losing money.
How To Use The Calculator
- Risk per trade: the share of your balance you risk on each trade, for example 2%.
- Win rate: the percentage of your trades that win, for example 45%.
- Average win ÷ average loss: how big your wins are compared with your losses. 1.5 means the average win is one and a half times the average loss.
- Number of trades: how many trades to simulate, for example 200 (up to 2,000).
- Drawdown that counts as ruin: the fall from a peak that you could not accept, for example 50%.
The calculator runs your strategy 3,000 times with random outcomes and shows:
- Chance of a drawdown that deep: how many of the simulated traders fell by your ruin level from a peak at some point.
- Expected result per trade: your average gain or loss per trade as a share of your balance. If this is negative, the strategy loses money over time, whatever the position size.
- Median balance after all trades: the typical outcome.
- Bad case (worst 5%): what the unluckiest one in 20 traders ended up with.
- Typical worst drawdown: the deepest fall from a peak that a typical trader saw along the way.
The simulation uses random numbers, so the results change slightly each time you change a value.
Why Losses Are Harder To Recover Than They Look
A loss and the gain needed to recover from it are not the same size. Lose 10% and you need 11.1% to get back. Lose 50% and you need 100%, a doubling of what is left. The recovery table in the calculator shows this for losses from 5% to 90%.
This is why protecting your account matters more than chasing big wins. The deeper the hole, the harder it is to climb out.
What The Results Tell You
Try the same strategy at 1%, 2% and 5% risk per trade. The expected result per trade grows with risk, but the chance of a deep drawdown grows much faster. Most traders find that 1–2% gives a sensible balance between growth and survival.
Also try lowering your win rate by five percentage points. Real results are often worse than backtests, and a strategy with a small edge can turn into a losing one.