Trading Risk Blog
Risk of ruin, position sizing, Monte Carlo simulation, and statistical survival for traders.
Drawdown Risk Calculator: Understanding Your Worst Case
Returns tell you the best case. Drawdown analysis tells you the worst. Here's why drawdown matters more.
Read articleOptions Trading Risk Management: The Math Behind Survival
Options add complexity to risk management. Premium, time decay, and defined risk all change the ruin equation.
Read articleThe 2% Rule vs. Actual Ruin Probability
Everyone knows the 2% rule. Few know whether it actually works for their specific strategy. Here's how to find out.
Read articleWhy Most Retail Traders Fail (A Statistical Explanation)
The 90% failure rate in retail trading isn't about bad picks. It's about position sizing and ruin probability.
Read articleExpected Value vs. Survival Probability: The Trader's Dilemma
Positive EV doesn't mean you'll survive. Here's why both metrics matter and how they interact.
Read articleHow Many Trades Until Statistical Failure?
100 trades? 500? The number of trades before statistical failure depends on your edge and position size.
Read articleMonte Carlo Backtesting: Why One Backtest Is Never Enough
Your backtest showed a 40% return. But that was one path. Monte Carlo shows the other 9,999.
Read articleThe Probability of Blowing Up Your Trading Account
Even a strategy with a positive expected value can blow up your account. The math explains why.
Read articlePosition Sizing for Day Traders: The Math That Keeps You Alive
Position sizing is not about maximizing profit. It's about surviving long enough for your edge to play out.
Read articleRisk of Ruin Calculator: What Every Trader Should Know
Your win rate means nothing without knowing your risk of ruin. Here's how to calculate the probability of blowing up your account.
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