Risk of Ruin Scenario Calculator

Six-step workflow

1. Copy current values from the official account, platform, or journal.
2. Keep every unit consistent; do not mix ticks, points, pips, dollars, or percentages.
3. Enter the planning assumptions without changing them to force a preferred answer.
4. Calculate and read every output, including the warning below the headline number.
5. Verify instrument specifications and binding firm rules at the official source.
6. Save the result with its date and compare it with what actually happened.

Understand the output

Formula: This simplified model converts the ruin threshold into risk units and applies an idealized fixed-edge approximation.

Worked example: A 10% ruin threshold with 0.5% risk contains 20 fixed risk units. Even a positive estimated edge can experience adverse sequences.

Common mistakes: treating the estimate as precise, entering backtest-best values, ignoring correlation and regime change, and defining ruin too narrowly.