PropSurvival · The survival math · Seeded Monte Carlo

Why position size — not edge — decides whether a profitable trader ruins

Numbers first: a real +0.30R edge is 13% ruin at 1% risk vs 45% at 3% — same edge, only size changed. Answer first: an edge tells you where the odds point; risk of ruin tells you whether you'll still be trading when they pay out — and size is the lever that moves it most.

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Run your ruin share free — +0.30R edge, size is the lever →

The finding

44.8%

Risk of ruin — same +0.30R edge, 3% risk per trade

Binding constraint — risk per trade, which you set yourself

01 · The paradox

Can a winning trader still go broke?

Yes — and it isn't rare. One trader, one genuine +0.30R edge. At 1% risk the chance of ruin is 13%. Change nothing but the size — 3% risk — and it's 45%.

Ruin isn't caused by being wrong on average. This trader is right on average. Ruin is caused by a losing streak arriving before the edge has compounded enough to absorb it. Every account has a floor it cannot fall through and climb back from — and variance, not skill, decides whether you reach it first.

The teachable fact: same edge, 13% → 45% ruin, from position size alone

Two traders, the same +0.30R edge. How differently can they end?

13.4% of paths ruined at 1% risk; 44.8% at 3%. The edge is identical — the size is not.

risk of ruin · same +0.30R edge · 5% drawdown floor · 20,000 seeded paths

How much does one extra tenth of a percent of risk cost you?

Ruin climbs faster than risk does: doubling risk from 1% to 2% takes ruin from 13.4% to 33.3%.

risk of ruin by risk per trade · 5% floor · lives = room ÷ risk · 20,000 paths per bar

02 · The framework

How many “lives” do you actually have?

Count them: drawdown room ÷ risk per trade. A 5% floor, risked 1% at a time, is five lives. Risked 3%, it's under two. Fewer lives, steeper cliff.

This is the whole game in one number. Your edge decides how fast you win lives back; your size decides how many you start with — and you set that on every single trade. Halving your size doesn't halve your risk of ruin, because ruin decays exponentially with lives — in this data, each added life cuts it by roughly a third. That's why the lever is so violent in both directions: 3% risk to 0.5% takes ruin from 45% to about 2%.

View the numbers as a table

Risk of ruin (%) by risk per trade — 5% drawdown floor
Risk / trade	Lives	Static floor	Trailing floor
0.5%	10.0	2.2	8.4
1.0%	5.0	13.4	30.7
1.5%	3.3	23.8	42.6
2.0%	2.5	33.3	51.7
3.0%	1.7	44.8	63.3

03 · The floor that moves

What if the floor chases you up?

A trailing floor roughly doubles risk of ruin at the same number of lives. And a trailing floor that never freezes drives ruin toward a certainty.

A static floor grades one number: your deepest dip below the start. A trailing floor grades your deepest dip from any peak — every new high re-arms it. That difference is worth double: at five lives, static ruin is 13%; trailing, 31%. And if the floor never stops rising, even ten lives can't save you — run long enough and some pullback from some peak will be deep enough, so ruin approaches 100%. This is the mechanism our static-vs-trailing study isolates across eight published rule sets.

See a real trailing floor →Watch it end a trader →

Does the floor type change the answer, or only the risk size?

Both, and not equally: at five lives a static floor ruins 13.4% of paths and a trailing one 30.7%.

risk of ruin by lives · three floor types · reference edge · 20,000 paths per point

Can you reach the target before the floor reaches you?

At five lives you win that race 79% of the time. At three lives, 67%.

probability of locking the floor before ruin · trailing account · by lives

04 · The way out

So how do you actually survive it?

Under a trailing floor that stops rising, survival is a race. Bank a cushion before variance takes it, and the floor stops — after that you're on a static floor and far safer.

Some rule sets stop the trailing floor rising once it reaches the starting balance; where a firm's documentation does not settle that, this model keeps the floor trailing. Where it does stop, survival becomes a sprint: reach a profit cushion first and the chase is over. At five lives you win that race 79% of the time; at ten lives, 93% — which is why some traders deliberately run half size until the cushion is banked, then normalize. The three levers, ranked by how much control you actually have: your size (total control, today), your floor type (you choose the firm), and your edge (real, but slowest to move).

The teachable fact: lock the floor and a trailing account becomes a static one

05 · The takeaway

Ruin is the one risk you set yourself.

You can't control variance. You choose your number of lives. Every other lever is slow; position size works on the very next trade.

Find your ruin share free — +0.30R edge, 13% at 1% risk vs 45% at 3% →

Enter your win rate, your average win and loss in R, and your risk per trade — or import a trade CSV — and get your risk of ruin, your most likely failure cause and your pass probability under each firm's actual drawdown rules. Nothing you enter leaves your device.

Five facts worth keeping

1 · Risk of ruin is not the opposite of an edge.: A real +0.30R trader still has a 13% chance of ruin at 1% risk, 45% at 3%.
2 · Your lives = drawdown room ÷ risk per trade.: It's the single number that sets the cliff. You control the denominator.
3 · Size is the fastest, strongest lever.: 0.5% risk cuts ruin to ~2%; edge takes months to move, size takes one trade.
4 · A trailing floor roughly doubles ruin.: 13% → 31% at five lives; un-frozen, it heads toward 100%.
5 · Under a trailing floor that stops rising, survival is a race to lock a cushion.: Win it (79% at five lives) and the floor stops chasing you.

Do you even have an edge? →Free risk-of-ruin calculator The full study Prop trading glossary

PropSurvival is independent analytical software — not affiliated with any firm, and not investment advice. Every figure here is a measured output of a seeded Monte Carlo model for one stated trader profile (52% win rate, 1.6R average win, −1R average loss, 0.05R cost, +0.302R expectancy per trade; 20,000 paths per cell, mulberry32 seed 12345). Your own numbers are the only ones that describe you.

How fast does ruin fall as you add lives?

How many points of ruin does each extra life buy?

16 points of ruin between 1.7 and 3 lives; 2 points between 8 and 10.

risk of ruin by lives · static 5% floor · reference edge +0.302R · 20,000 seeded paths per point

Ruin does not fall in a straight line, and that is the whole reason size is the violent lever. Between 1.7 and three lives the curve loses 16 points of ruin; between eight and ten it loses 2. The marked vertical is where the reference trader stands — 1% risk against a 5% floor, five lives, 13.4% — and it is marked because it is the number every other figure on this page is quoted against: triple the size and the same trader reads 44.8%; let the floor trail instead of stand still and the same five lives read 30.7%. The left of this curve is not a warning colour, it is a slope: each life you give back costs more than the last one you bought.

Provenance · every point is a figure already stated on this page. 1.7 / 2.5 / 3.3 lives = 3.0% / 2.0% / 1.5% risk against a 5% floor, from the risk-per-trade table (44.8 / 33.3 / 23.8). 3 / 4 / 6.7 / 8 lives = the static-floor series in the floor figure (28.9 / 19.5 / 7.2 / 4.2). 5 and 10 lives appear in both series and agree exactly (13.4 and 2.2). No point is interpolated or fitted.

Appendix · the same table, one row at a time

At your risk per trade, how many lives do you hold — and what is your ruin?

Lives · room ÷ risk5.0

Ruin · static floor13.4%

Ruin · trailing floor30.7%

Five stops, because this page publishes five rows. The ladder snaps to a published row and will not interpolate between them — a value between two measured rows is a value nobody measured. Source: the risk-per-trade table in scene 03 and the provenance note above, both on this page.

Questions traders actually ask

What is risk of ruin in trading?

Risk of ruin is the probability that your account falls to a level it cannot recover from — a floor — before your edge has time to compound. It is not the same as being wrong on average. A trader can have a genuinely positive edge and still carry a high risk of ruin, because a losing streak can reach the floor before the edge pays out. In prop trading the floor is not zero; it is the firm's drawdown limit, which sits far closer to your starting balance than most traders assume. Run the free calculator at /app?src=risk-of-ruin against your own win rate and risk size.

Can a profitable trader still blow up?

Yes, and it is common. Holding a fixed reference trader with a real +0.302R expectancy per trade, the measured risk of ruin against a 5% drawdown floor is about 13% at 1% risk per trade and about 45% at 3% risk per trade — same edge, only the position size changed. Profitability describes the average outcome; risk of ruin describes the worst path that variance can take you down before the average arrives.

How do I reduce my risk of ruin?

Position size is the fastest and most powerful lever, because it directly sets how many 'lives' you have: drawdown room divided by risk per trade. In the reference simulation, cutting risk per trade from 3% to 0.5% dropped risk of ruin from about 45% to about 2%. The other levers are choosing a firm with a static rather than trailing drawdown, and improving your edge — but edge is the slowest to change, while size can be halved on the very next trade.

Why does a trailing drawdown increase risk of ruin?

A static floor sits still, so a normal pullback that stays above it is survivable. A trailing floor rises under every new equity high, so the same pullback measured from a fresh peak can breach it. At five lives, the reference trader's risk of ruin is about 13% under a static floor and about 31% under a trailing one — roughly double. A trailing floor that never freezes pushes risk of ruin toward 100% over a long enough horizon, because the floor keeps chasing every new high. Some rule sets stop the trailing floor rising once it reaches the starting balance, which turns survival into a race to bank that first cushion; where a firm's documentation does not settle whether its floor stops inside an evaluation, this model keeps the floor trailing.

Working backwards: free path before size — not edge — decides who keeps the account

A real +0.30R edge is 13% ruin at 1% risk and 45% at 3%, same edge — the lever is size, not edge. Type your win rate, average R, and risk size — or import your trade CSV — and the engine returns a simulated survival share under a stated drawdown floor, for the same lives framework this page measures. Free, no signup, run in your browser. The dedicated free tool is also at risk-of-ruin-calculator.

Open the free path — carry +0.30R through 13% vs 45% ruin by size →

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