Risk Analysis & Sizer
New LabVerify expectancy, profit factor, drawdown breach risk, and streak estimations using a simplified risk approximation.
How to use this Trading Risk Analyzer
Set win rate, average win, average loss, risk per trade, trade sample size, and ruin threshold. Analyze trade expectancy, profit factor, win/loss streak probability, risk of ruin, and position sizing parameters for your trading system.
Strategy Input
Same inputs + same seed = same result. Change seed to test a different path sample.
Analysis Pending
Run the analysis on your strategy parameters to see expectancy, ruin percentages, and streak estimations.
Educational only. Not financial advice. Results are simplified estimates based on the inputs you provide. They do not include brokerage, taxes, slippage, liquidity, bid-ask spread, margin rules, dividends, early exercise, exchange-specific contract rules, or emotional execution mistakes. Use this as a learning and planning tool, not as a trade recommendation.
Risk Analysis & Sizer Guide
This tool converts win rate and risk-to-reward into expectancy, profit factor, rupee EV, streak estimates, and drawdown breach risk. It helps you check whether your system has a positive edge before thinking about sizing.
How to use this tool
- 1Enter account capital so R-based results can be translated into rupees.
- 2Enter realistic win rate and average R:R from your trading history.
- 3Enter risk per trade to calculate expected rupee value per trade.
- 4Set a drawdown test level, such as 20%, to estimate whether your sizing is too aggressive.
- 5Study expectancy and drawdown breach risk together. Positive expectancy does not automatically mean safe sizing.
Key metrics
Expectancy
Average expected result per trade, measured in R.
How to use it: Positive expectancy means the system has mathematical edge before costs. Negative expectancy means sizing cannot save it.
EV Per Trade
Expected rupee value per trade based on account capital and risk percentage.
How to use it: This makes abstract R-multiple edge visible in actual money.
Profit Factor
Gross expected wins divided by gross expected losses.
How to use it: Above 1 means expected wins exceed expected losses before costs.
Estimated Drawdown Breach Risk
The percentage of simulated paths that hit the selected drawdown level.
How to use it: If this is high, reduce risk per trade even if expectancy is positive.
Streak Estimates
Approximate win/loss streak lengths expected over the sample.
How to use it: Use streaks to check whether your psychology and account can survive normal variance.
Formulas used
Expectancy
Expectancy = (Win Rate × Avg Win R) − (Loss Rate × 1R)If win rate is 50% and average win is 1.5R, expectancy is 0.25R per trade.
EV Per Trade
EV ₹ = Expectancy R × Account Capital × Risk %This converts R expectancy into estimated rupee expectancy.
Profit Factor
Profit Factor = Expected Gross Wins ÷ Expected Gross LossesA profit factor above 1 is positive before costs. Brokerage and slippage can reduce it.
Common mistakes to avoid
- • Do not trade a negative-expectancy system just because risk per trade is small.
- • Do not assume profit factor alone proves a system is safe.
- • Do not ignore streaks. A profitable system can still have painful losing sequences.