Risk of Ruin Calculator for Prop Firm Accounts
Risk of ruin is the chance your account hits its drawdown limit before it reaches the profit target. Enter your win rate, reward:risk, risk per trade, drawdown and target to get it, worked out exactly for a static or a trailing drawdown.
Your numbers
Same trades, different risk per trade
| Risk per trade | Losses in a row to fail | Risk of ruin |
|---|
Get your real win rate and average R, freeTJ works out your win rate, average R and expectancy from the trades you log or import, so the numbers above can be yours instead of guesses.
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How it works
Every trade is a step: a win adds reward:risk × your risk, a loss takes away your risk. The account ends when the balance reaches the target (pass) or falls to the floor (fail). The calculator solves that chain exactly instead of simulating it, so the same numbers always give the same answer.
- Static floor: the floor stays at starting balance − max drawdown.
- Trailing (closed trades): the floor is your highest closed balance − max drawdown, so it moves up after every new high and never down. Tick the box if the trail stops once the floor reaches the starting balance.
- Losses in a row to fail = max drawdown ÷ risk per trade, rounded up.
- Break-even win rate = 1 ÷ (1 + reward:risk). Expectancy = win rate × reward:risk − loss rate, in R.
Reward:risk is used in steps of 0.25 (1.6 becomes 1.5). Fees, slippage and partial exits aren't modelled; put your average win and loss after costs into reward:risk.
Three worked examples
| Floor | Win rate | Reward:risk | Risk | Drawdown | Target | Risk of ruin |
|---|---|---|---|---|---|---|
| Static | 50% | 1:1 | $500 | $2,000 | $3,000 | 60.0% |
| Static | 60% | 1:1 | $500 | $2,000 | $3,000 | 18.3% |
| Trailing | 50% | 1:1 | $1,000 | $2,000 | $2,000 | 55.6% |
Example 1. Four losses reach the floor and six wins reach the target. With even odds, the chance of passing is 4 ÷ (4 + 6) = 40%, so the risk of ruin is 60%, and it takes 4 × 6 = 24 trades on average to finish.
Example 2. Same account, 60% winners. With q/p = 0.4 ÷ 0.6 = 2/3: pass = (1 − (2/3)4) ÷ (1 − (2/3)10) = 0.8025 ÷ 0.9827 = 81.7%, so the risk of ruin is 18.3%. Risking $250 instead (8 losses to the floor, 12 wins to the target) drops it to 3.9%.
Example 3. Two losses or two wins end it. After a first win the trailing floor moves up $1,000, so from there one win passes and two losses fail: pass = 2/3. After a first loss, one more loss fails. Pass = ½ × 2/3 + ½ × ½ × pass, so pass = 4/9 = 44.4% and the risk of ruin is 55.6%. With a static floor the same trades fail 50% of the time.
Example numbers to show the arithmetic, not a result or a target.
Which drawdown does your firm use?
Firms trail differently, and the difference changes your risk of ruin. Two examples from the firms' own help pages:
- Topstep's Maximum Loss Limit rises with your end-of-day balance, never moves down, is monitored in real time during the session, and locks once it reaches the starting balance.
- Apex Trader Funding's intraday trailing drawdown follows your peak balance including open profit, in real time. Where it stops depends on the account and platform.
If your floor trails open profit, a trade that runs up and comes back moves the floor too, so your real risk of ruin is higher than this calculator shows for closed trades. Rules change and differ by plan, so check your firm's current page. The futures prop firm rules cheat sheet has the rest, and the drawdown calculator shows where your floor is today.
Sources
- Topstep: What is the Maximum Loss Limit? (checked 20 October 2026)
- Apex Trader Funding: Intraday Trailing Drawdown Explained (checked 20 October 2026)
TJ isn't affiliated with any prop firm. The maths is the classic gambler's-ruin problem, solved exactly for a fixed win and loss size.
To size each trade to the risk you pick here, use the futures position size calculator. To measure your trades in R, read R-multiple explained.
Let TJ watch these numbers for you
TJ measures your win rate, average R and expectancy on the trades you log or import, and Prop guard watches your drawdown and daily limit on every trade. Free for 3 days, then pick a plan.
Questions
What is risk of ruin for a prop firm account?
It's the chance that the account hits its drawdown limit before it reaches the profit target. It depends on your win rate, your average win compared with your average loss, how much you risk per trade, and how much room the drawdown gives you.
How do you calculate risk of ruin?
Treat every trade as a step up (a win of reward:risk × your risk) or a step down (a loss of your risk) and work out the chance of reaching the target before the floor. With 1:1 trades and a static floor there's a closed formula: pass = (1 − (q/p)^a) ÷ (1 − (q/p)^N), where a is the losses to the floor and N is that plus the wins to the target. This calculator solves the same problem exactly for any reward:risk in steps of 0.25, and for a trailing floor.
Does a trailing drawdown raise my risk of ruin?
Yes, for the same numbers. A static floor stays where it started; a trailing floor moves up behind your highest balance, so a win followed by losses can end the account even though you never went below your starting balance. In the third example below, the same 50% win rate fails 55.6% of the time with a trailing floor and 50% with a static one.
Does risking less per trade always lower risk of ruin?
Only when your trades have a positive expectancy. With 60% winners at 1:1, halving the risk from $500 to $250 drops the risk of ruin from 18.3% to 3.9% (static $2,000 floor, $3,000 target). At exactly break-even the risk size makes no difference, and with a negative expectancy smaller trades fail more often, because more trades means the edge against you has longer to work.
What win rate do I need to pass a prop firm evaluation?
There's no single number. Your break-even win rate is 1 ÷ (1 + reward:risk): 50% at 1:1, 33% at 2:1. Above it, the risk of ruin falls as your risk per trade gets smaller relative to the drawdown. Use your own logged win rate and average R, not a hoped-for one.
Does this include the daily loss limit or the consistency rule?
No. It models the overall drawdown and the profit target only, with every trade risking the same amount and each trade independent of the last. A daily loss limit, a consistency rule, a minimum number of days and a losing streak that makes you trade differently are not in the maths, so treat the result as a guide, not a forecast.
Journaling software. Not financial advice.