Risk of ruin formula in forex

Beginner Questions
1

Hi

I am interested in calculating the Risk of ruin on my trades. base on diffrent set of risk.

Assuming, i want to find the probability % of loosing 10%, 20% or 30% of my capital.

i found this formulla:
risk_of_ruin = ((1 - Edge)/(1 + Edge)) ^ Capital_Units

how ever i need someone who is good in calculating the risk of ruin give me a good explanation, examples etc to make it undrestandable,

I hope some one can help here. :slight_smile:

Thank you

2

backtest.
you might find your answer.

the longer to the past, the better modeling = more accurate result.

then see worse period of DD, number of losing and winning trades in that period, and decide your risk ( as % of your account)…and you should have the chances of ruin.