Understanding risk

Trading Statistics

Mathematical relationships between strike rate, expectancy, and statistical risk. For educational purposes only.

Losses

Consecutive Loss Probability

Probability of experiencing a losing streak of N trades over a 50-trade sample, across strike rates

These figures are mathematical probabilities derived from binomial distribution. They are illustrative only and do not represent any specific trading system or strategy.

Highlight strike rate 55%
Chance of N Consecutive Losses — 55% strike rate
Wins

Expectancy Heatmap

Expected R per trade across combinations of strike rate and reward-to-risk ratio

Expectancy is a mathematical concept from probability theory. A positive expectancy does not guarantee profitable outcomes over any finite number of trades.

Display:

Gold border marks the zero-expectancy threshold for each R-multiple column. Cells above are negative; cells below are positive.

Explorer

Risk of Ruin Explorer

Statistical relationships between probability parameters and theoretical risk metrics

This tool illustrates mathematical relationships between probability, reward-to-risk, and statistical risk metrics. It does not account for individual circumstances and does not constitute financial advice.

Strike Rate55%
Average Win (R)2.0R
Drawdown Tolerance20%
Sample Trades200
Risk / Trade — theoretical variable (%)1.0%

Mathematical input for the ruin formula only. No dollar amounts are calculated or implied.

R
Mathematical expectancy per trade
losses
Statistically expected maximum consecutive losses over 200 trades
%
Theoretical risk of ruin at this parameter combination
Risk of Ruin
20%
50%
80%

Understanding Drawdown Tolerance

Drawdown tolerance refers to the maximum percentage decline from peak account equity that a trader is willing to accept before considering their strategy no longer viable (ruin). This is not a recommended figure — it is a personal threshold that varies between traders depending on risk appetite, strategy type, and psychological tolerance for loss. In this tool, drawdown tolerance is used purely as a mathematical variable within the risk of ruin formula. It does not constitute advice on how much risk you should take.