Trading Software
    Menu Close

    Risk of Ruin Calculator

    The cTrader Risk of Ruin (ROR) Calculator is an advanced tool to evaluate your probability of loss when trading manually or by using an automated trading system, it will calculate the probability of hitting a specific drawdown or ruin.



    Risk of Ruin vs Drawdown Risk?

    When you calculate the risk-of-ruin (ROR) you define the probability of your loss from your original account balance, for example, if you started trading with £1000, if your risk of ruin was 20% then you have a chance of losing 20$ of your balance or £200, but as your equity gets larger due to winning trades your ROR decreases.

    When you calculate your risk-of-drawdown (ROD) the drawdown will be the same throughout the lifetime of your account because the ROD will only get bigger if the losses in your account are lower than the previous highest drop. So, the difference between the account equity and balance is lower than at any other time, which is the highest drawdown amount.


    How To Use The Calculator?

    The following settings are explained below:

    • Win rate (%) – how many of your trades end up in profit as a percentage.
    • Average profit/loss - average winning vs losing trades as a ratio.
    • Risk per trade (%) – The risk taken for each trade as a percentage.
    • Number of trades – the number of trades, the higher the number of trades, the higher the chance for drawdown and ruin.
    • Max drawdown - the maximum drawdown as a percentage you are willing to take.


    How to Read The Results

    A win rate of 50% and an average profit loss of 1 against a risk per trade of 2% when 100 trades have been placed with a max drawdown of 30% would show a probability risk for the peak-to-valley drawdown of 13.8% and total risk-of-ruin to blow your account to be 8.1%


    Position Size Calculator

    We also have a position size calculator that will automatically tell you your position size before you place a trade based on how much of your account you wish to risk and stop loss.


    Risk & Reward Charting Tool

    The tool enables traders to precisely outline and evaluate the potential risks linked with a trade. By mapping out risk levels on a chart, traders can visually gauge their exposure to risk in comparison to potential rewards, aiding them in making well-informed choices. Risk and reward charting tools furnish traders with impartial benchmarks for appraising trade setups. Rather than depending solely on intuition or emotions, traders can utilize quantitative data to evaluate the risk-reward ratio of each trade opportunity, fostering more disciplined and uniform decision-making processes.


    Advanced Trade Protection

    The cTrader platform lacks an automated advanced protection feature for trades set to open in the future, such as automated or pending orders. However, this tool serves to safeguard your active market orders when you're away from your workstation. It includes five take-profit targets, break-even stops, trailing stop-loss, and stealth stops for added security.


    Risk Calculator Assistant

    The cTrader Risk Calculator Tool resembles an on-screen panel akin to magic keys, empowering you to swiftly submit, close, and manage orders with remarkable speed. It offers total risk management at the click of a mouse and is ideally suited for scalping in Forex, indices, cryptocurrencies, and shares.