Risk of Ruin Calculator for Australia traders

This calculator runs a Monte-Carlo simulation to estimate the probability your trading account hits a specified drawdown threshold before completing a set number of trades. For Australian traders managing AUD-denominated accounts, it factors in FX conversion without sending data to any server.

The risk of ruin metric answers a practical question: given your win rate, risk-reward ratio, and per-trade risk percentage, what are the odds your equity drops by X% before you've taken N trades? The calculator runs thousands of simulated sequences, each randomly generating wins and losses according to your inputs, then tracks equity drawdown. If a simulation hits the ruin threshold, it's counted. The final probability is the fraction of simulations that "died" before completing all trades.

Monte-Carlo simulation over N trades; ruin = equity reaches drawdown threshold before N completes

The key nuance: this is a forward-looking probability, not a guarantee. Real trading includes variable position sizes, changing market conditions, and slippage that a fixed-parameter simulation cannot capture. For AUD accounts trading USD-denominated pairs, the calculator assumes constant FX rates — in practice, AUD/USD fluctuations add or subtract from margin balances, which can accelerate or delay ruin.

Example: AUD/JPY trader

• Win rate: 0.45 (45%)
• Risk-reward ratio: 2.0
• Risk per trade: 1.0% of account
• Total trades: 200
• Ruin threshold: 30% drawdown

The simulator runs 10,000 sequences of 200 trades each. Each sequence randomly assigns wins and losses based on a 45% win probability, with wins adding 2.0% and losses subtracting 1.0% from equity. If equity ever drops 30% below starting balance before trade 200, that sequence is marked as "ruined."

Result: ~3.2% ruin probability over 200 trades

This means roughly 3.2% of simulated trading careers ended in a 30%+ drawdown before completing 200 trades. The other 96.8% survived the full sequence — though some may have experienced significant temporary drawdowns.

• JPY pairs: Pip values for JPY pairs (e.g., AUD/JPY) are calculated differently — one pip is 0.01 yen, not 0.0001. The calculator handles this automatically, but ensure you're entering the correct pip value if overriding defaults.
• Non-AUD accounts: If your account is denominated in USD or GBP, the calculator still works — but the risk-per-trade percentage is relative to your base currency. FX conversion between trade P&L and account currency is not simulated.
• Mini/micro lots: Risk per trade scales linearly with lot size. A 1% risk on a micro lot (1,000 units) is the same percentage as on a standard lot (100,000 units) — only the dollar amount changes. The calculator is percentage-based, so lot size doesn't affect ruin probability.
• Variable position sizing: This calculator assumes fixed risk per trade. If you increase risk after wins or decrease after losses, actual ruin probability differs.

• Drawdown Calculator — Calculate maximum historical drawdown from a series of trade results.
• Risk-Reward Calculator — Determine required win rate for profitability at a given risk-reward ratio.
• Monte Carlo Simulator — Run full equity curve simulations with variable position sizing.

• Expectancy — The average amount you can expect to win (or lose) per trade, calculated as (win rate × average win) − (loss rate × average loss).
• Drawdown — The peak-to-trough decline in account equity, usually expressed as a percentage of peak balance.
• Win rate — The percentage of trades that close at a profit, excluding break-even trades.

If you don't have a broker yet and want to test these calculations on a demo, FxPro accepts Australia residents. We are FxPro affiliates — see disclosure.

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