Losing-Streak & Drawdown Calculator
See how much a run of losing trades draws down your balance at a fixed risk per trade.
Even a good strategy can blow up an account if each trade risks too much. This tool shows how a run of losing trades draws down your balance at a fixed risk per trade — the intuition behind risk of ruin.
Smaller risk per trade means a losing streak hurts far less. This is educational only and assumes a fixed fraction risked on each trade.
Risk note: This calculator is for education only and is not financial advice. Crypto trading is high-risk; never trade with money you cannot afford to lose, and remember that fees, slippage and gaps can make real outcomes worse than any model.
FAQ
What is risk of ruin in trading?
The probability that an account falls to a level it cannot realistically recover from before the strategy's edge has a chance to play out. It rises sharply with risk per trade: drawdowns compound geometrically, and a 50% drawdown needs a 100% gain just to get back to even.
How likely is a long losing streak?
Far more likely than intuition suggests. At a 50% win rate, a run of 7–8 consecutive losses is practically certain somewhere within a few hundred trades. Streaks are a property of probability, not proof a strategy is broken — which is why position sizing must assume they will happen.
How do I reduce my risk of ruin?
Lower the fraction risked per trade — it is the variable with the most leverage. Risking 1% instead of 5% turns a 10-loss streak from a 40% drawdown into under 10%. Avoiding oversized leverage and never widening stops are the other two levers that matter.