ENTRY  N° 61  /  80
Glossary

Risk of ruin

Part of the theme Risk and position sizing.

Definition

Risk of ruin is the probability that a run of losses depletes an account below a usable level before a strategy's edge can play out.

Even a profitable strategy hits losing streaks; the question is whether position size lets you survive them. Small risk per trade pushes risk of ruin toward zero.

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