Risk of Ruin Calculator
According to experts, some calculation methods have the limitation that the RoR is determined with a focus on the profit and loss ratio, without putting the influence of the average number of transactions that are closed in profit in proportion to the transactions in which a loss must be realized and to appreciate accordingly in terms of calculation.
If the absolute number of winning trades outweighs the average number of losing trades, the calculation of the RoR will lead to a different result than if other assumptions were made. The method used by Ralph Vince is more complex compared to other approaches, but conversely it gives more accurate results. If you are not yet familiar with the topic, you can use the sample calculations we provide to understand the calculation steps.
The method presented here is based on an approach attributed to financial mathematician and book author Ralph Vince (Google Books).
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