Advanced14 min readAdvanced
Risk of ruin: the math of not blowing up
Every strategy has a probability of total loss. Most traders have never computed theirs — and the formula is a century old.
1×2×4×8×16×32×
Median outcome10th–90th percentileSample pathsStarting capital
Each faint trail is one simulated future for this strategy. The bold line is the median — half of runs finished above it, half below. The shaded band spans the lucky 10th to unlucky 90th percentile, so an outcome inside the band was reasonable to expect; outside, less so.
[PLACEHOLDER-ARTICLE — full body to be written. Stub document so the risk-money-mgmt track renders a second entry.]