This is a nifty tool that tells you how likely you are to reach a defined equity growth or decline based on historical trade statistics. Optimal F is defined as the “optimal” amount you should risk on any trade to maximize your profit potential. The Probability of Ruin is defined as the probability of the account reaching a defined point of ruin before reaching a defined point of success.
Below is a screenshot of the output from this tool. It shows that based on the historical trade win/loss data entered, the optimal amount to risk per trade is 39%. The probability of ruin for the account (in this case defined as a 50% loss of capital) is 24%.
