Edge map
Win rate and reward to risk, after costs, on one map.
Free risk tools
Drawdown simulator
Two thousand possible futures of your next trades, at your own win rate, reward and size. See how deep a normal losing run goes, how long the streaks get, and the most you can risk a trade and still stay inside your limit.
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- No sign-up
- Nothing you type is stored
How you trade
Your next 200 trades
An example with typical numbers. Change any box to use your own.
Too much risk for your limit. At 1% a trade, the chance of falling 20% from a high within 200 trades is about 1 in 6 (16%).
- Your edge per trade
- +0.07 of the risk after costs ($7.50 a trade on $10,000 at 1%). Break-even win rate at 1.5 to 1: 42.0%.
- Highest risk that fits your limit
- About 0.76% a trade keeps the chance of touching -20% at 1 in 20 or less. Size a trade at 0.76%.
- The Kelly size
- 4.9% a trade is the theoretical fastest-growth size for these numbers. It assumes your win rate and reward are known exactly, and it brings deep falls; professionals who use it trade a quarter to a half of it (1.23% to 2.46%), and the limit above usually matters more.
- Deepest fall from a high
- Typical 13.6%. One future in ten falls 22.4% or more; one in a hundred 31.4%.
- Longest losing streak
- Typical 8 in a row; one future in ten has 11 or more. Plan for it before it happens.
- After 200 trades
- Middle +14.4%. A bad one in ten -8.6% or worse, a good one in ten +43.2% or better. 21% of futures end below the start.
| Risk a trade | Chance of -20% | Typical deepest fall | Typical result |
|---|---|---|---|
| 0.25% | 0.0% | 3.5% | +3.7% |
| 0.5% | 0.2% | 7.0% | +7.4% |
| 1% | 16.4% | 13.6% | +14.4% |
| 1.5% | 49.2% | 19.9% | +21.0% |
| 2% | 77.3% | 25.9% | +26.9% |
| 3% | 98.1% | 36.9% | +36.5% |
| 5% | 100.0% | 55.4% | +44.4% |
2,000 simulated futures of 200 trades, each a win or a loss at your win rate, sized from the balance at the time. Real trades are not independent coin flips: losses bunch in bad markets, so the real worst case is deeper than this.
Education only, not investment advice. The answer comes from the numbers you typed in, not from your account or the market. Simulated results are hypothetical and have limits: real trading has slippage, gaps, changing results and emotions. Trading leveraged products can lose money quickly, including all of it. Risk warning
Educational only, not financial advice; trading involves risk.
Why the losing streak decides, not the average
An account is ended by its worst stretch: a loss limit, a margin call or a lost nerve. A trader who wins 45% of the time will, over a few hundred trades, almost certainly see eight or more losses in a row. That is not bad luck; it is the normal arithmetic of a coin that lands on losses more often than not. At 1% a trade those eight losses cost about 8%. At 5% a trade they cost a third of the account.
Deep falls are also hard to climb out of. After a 10% fall the account needs 11% to get back; after 20%, 25%; after 50%, 100%. That is why the size of each trade, not the choice of entry, decides most of what a trader keeps.
How to use the answer
- Take your win rate and reward from at least 50 real trades, better 200. A handful of trades says little.
- Set the drawdown limit to the fall you would really sit through, or your account's maximum loss if it has one.
- Risk no more than the "fits your limit" size, then size every trade with the position size calculator and write the rule into your trading plan.
Not advice and not a forecast. The answer is arithmetic on the numbers you type, not a test of a strategy. Baroq's own gold strategies are judged on real prices after costs on the record.
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Baroq never holds your money and never trades for you. Educational only, not financial advice; trading involves risk.