What is a Trade Return Calculator?
A Trade Return Calculator is an essential risk management tool designed to help traders visualize the potential growth of their capital over a series of trades. By inputting key metrics such as win rate, risk per trade, and reward-to-risk ratio, traders can simulate thousands of possible outcomes to understand the statistical probability of success.
Unlike simple profit calculators, our tool offers both deterministic and randomized simulations. This allows you to see not just the "perfect scenario" but also realistic fluctuations in your equity curve, helping you prepare for drawdowns and variance inherent in trading.
How to Use This Tool
Enter your Starting Balance (e.g., $10,000)
Set your Risk per Trade (recommended 0.5% - 2%)
Define your Win Rate based on historical performance
Choose Random Mode for a realistic simulation
Click Calculate to generate your equity curve
Export results to CSV for further analysis
Understanding Risk of Ruin
One of the most critical aspects of trading is avoiding the "Risk of Ruin"—the mathematical probability of blowing your account. By using this ROI Calculator, you can experiment with different position sizing strategies. You'll quickly see that risking too much (e.g., 5% per trade) can lead to catastrophic drawdowns even with a good win rate.
Professional traders typically aim for a Risk of Ruin near zero. This is achieved by keeping risk small (1-2%) and maintaining a healthy Reward-to-Risk ratio (minimum 1:1.5 or 1:2).