Monte Carlo Risk Review Workspace
Simulate long-term trading outcomes using win rate, risk-reward ratio, loss rate, fees, and trade count.
Use the tools to compare assumptions and understand ranges. They are not trading signals, financial advice, or guarantees of future results.
Capital values are calculated as unitless numbers.
1,000 simulated paths · Results depend on assumptions, not a forecast.
The average scenario is the arithmetic mean of all 1,000 paths at each plotted trade. It is a synthetic curve, not an individual trading path, so no winning or losing streak is assigned to it. Best and worst are actual paths selected by final capital within this sample, not limits on future outcomes.
The average line is synthetic. Best and worst are individual paths chosen by final capital. Select a scenario to inspect its scale.
Each tool is built for educational analysis: enter assumptions, review the calculation basis, and compare outputs before making your own decision elsewhere.
Flagship scenario tool
Runs random trading paths from win rate, risk/reward, loss size, fees, trade count, and starting capital. It helps traders and learners explore uncertainty, drawdown, and outcome ranges rather than predict a single result.
Limitation: simulations depend entirely on user inputs and simplified assumptions.
Review Monte Carlo inputsGrowth path
Estimates how a starting amount may grow across repeated compounding periods and compares simple versus compound growth.
Limitation: projected growth is mathematical only and is not a guaranteed return.
Open Compound CalculatorReference FX
Converts between major currencies using reference exchange-rate data and a transparent conversion formula.
Limitation: actual bank, card, broker, or exchange-office rates may differ.
Open Currency ConverterThe site focuses on transparent calculations, educational use, and reference data. You can adjust assumptions, compare paths or conversions, and use the output as a starting point for your own research.
Exchange-rate data can be delayed or unavailable. Verify important rates with your bank, payment provider, or another primary source before real transactions.
Trading Analysis Lab does not provide financial, investment, tax, or legal advice. Results depend on user inputs, market-data availability, and simplified formulas; no tool on this site guarantees future performance.
Monte Carlo analysis guide
Monte Carlo analysis helps you inspect how the same trading assumptions can produce different paths when wins and losses arrive in different orders. It is most useful when you compare the downside path, drawdown, and losing streaks before focusing on the middle path result.
The calculator runs random trade paths from win rate, reward/risk ratio, loss per trade, fee, trade count, and starting capital. The result is a range of possible outcomes from your inputs.
Enter conservative assumptions, run the simulation, then rerun with lower win rate, higher fees, or smaller risk size to see which input changes matter most.
Each path samples wins and losses from the win-rate assumption and applies the gain, loss, and fee to current capital for the selected number of trades.
A hypothetical setup with 10,000 starting capital, 48% win rate, 1:1.8 reward/risk, 1% loss per trade, 0.05% fee, and 150 trades can still show a difficult drawdown if losses cluster early.
Final capital is only one summary. Maximum drawdown shows the largest peak-to-trough decline, and longest losing streak shows how much sequence risk the assumptions may require you to tolerate.
The tool includes the visible fee input but does not fully model slippage, spread changes, taxes, liquidity, partial fills, margin rules, or changes in strategy quality.
Responsible use: Use the simulation to compare assumptions and stress cases. It is educational analysis only, not trading advice or a promise of future performance.
This calculator simulates possible capital paths using win rate, reward/risk ratio, loss rate, trading fees, number of trades, and starting capital.
Instead of showing only one final number, it creates 1,000 random paths using a Monte Carlo approach and compares the average, best, and worst scenarios. The average scenario is a point-by-point arithmetic mean of all 1,000 paths.
The average scenario is the arithmetic mean of all 1,000 paths at each plotted trade. It is a synthetic curve, not an individual trading path, so no winning or losing streak is assigned to it. Best and worst are actual paths selected by final capital within this sample, not limits on future outcomes.
Estimated win rate is the assumed percentage of winning trades. Reward/risk ratio compares the size of one win to one loss.
Loss per trade is the percentage of current capital lost on a losing trade. Fees are deducted from both winning and losing trades.
Each trade uses the same win probability and payoff ratio, with independent outcomes. Profit, loss and the fee are based on absolute pre-trade capital; the entered fee is charged once per complete trade. Streaks count outcomes before fees. This arithmetic model continues at negative capital and does not model bankruptcy or liquidation.
Final return is not enough by itself. Maximum drawdown and losing streaks help show how difficult the path may be in practice.
With positive capital and fixed rates, win/loss counts determine final capital. Trade order changes drawdown and streaks. The worst path is only the lowest final capital in this sample.
A high win rate does not always mean a good strategy. If the reward/risk ratio is poor, a few losses may erase many small wins.
A lower win rate may still work if the reward/risk ratio is strong enough. This tool lets you experiment with that relationship.
Maximum drawdown measures the largest decline from a previous capital peak. Even a profitable average result can involve stressful drawdowns.
The longest losing streak shows how many losses can occur in a row. Risk sizing should account for these periods.
This is an educational simulation based on the inputs you provide. It may not fully reflect liquidity, slippage, taxes, execution errors, emotions, or changing strategy behavior.
The result is not investment advice or a return guarantee.
Check the arithmetic
Let C be capital before the trade, l the loss fraction, R the reward/risk ratio, and f the fee fraction. Divide percentage inputs by 100: a 1% loss input means l=0.01, and a 0.1% fee means f=0.001.
After a winning outcome, capital is C + |C| × l × R − |C| × f. After a losing outcome, it is C − |C| × l − |C| × f. The notation |C| means absolute capital. The fee uses capital before the gain or loss and is deducted once for either outcome.
For the examples below, enter capital 10,000, loss per trade 1%, reward/risk ratio 2, fee 0.1%, and one trade. Set win probability to 100% or 0% to reproduce each calculation without random outcomes.
Gross profit is 200 and the fee is 10.
Gross loss is 100 and the same fee of 10 applies.
Same ending, different path
When capital stays positive and trade percentages stay fixed, the same number of wins and losses gives the same final capital. Reordering the winning and losing multipliers does not change their product. It does change the path, drawdown, and streaks.
Start with 100, a 50% loss fraction, reward/risk ratio 1, and no fee. A win multiplies capital by 1.5 and a loss by 0.5. Two wins and two losses therefore end at 100 × 1.5² × 0.5² = 56.25. These are two deliberately chosen sequences for checking the model, not predicted random outcomes.
100 → 150 → 75 → 37.5 → 56.25
100 → 50 → 75 → 112.5 → 56.25
Understanding a sample
The average scenario is the arithmetic mean of all 1,000 paths at each plotted trade. It is a synthetic curve, not an individual trading path, so no winning or losing streak is assigned to it. Best and worst are actual paths selected by final capital within this sample, not limits on future outcomes.
With final values of 10, 20, 40, and 80, the arithmetic mean is (10 + 20 + 40 + 80) ÷ 4 = 37.5. The sample median, averaging the two central values, is 30. The average scenario displays the equivalent of 37.5, while the median appears separately as P50 in the sample distribution.
Best and worst refer only to these 1,000 sampled paths, not bounds on every possible outcome or a 95% prediction interval. Their cards show drawdown and streaks from the selected real paths. The synthetic mean has no individual drawdown or streaks; maximum drawdown across the paths is summarized separately as a distribution.
Even if an event has an assumed probability of 0.1% per path, the chance of seeing it zero times in 1,000 independent paths is 0.999¹⁰⁰⁰, about 36.8%. Absence from this sample does not make a rare outcome impossible.
No. It is an educational simulation tool based on your inputs and does not guarantee any real investment return.
It repeatedly generates random outcomes to explore a range of possible results. Here it creates 1,000 trading paths and compares their arithmetic mean with the paths of highest and lowest final capital. The average scenario is the arithmetic mean of all 1,000 paths at each plotted trade. It is a synthetic curve, not an individual trading path, so no winning or losing streak is assigned to it. Best and worst are actual paths selected by final capital within this sample, not limits on future outcomes.
No. Risk-reward ratio, fees, losing streaks, and drawdown also matter.
It compares the size of a win to the size of a loss. A lower win rate can still work if wins are large enough.
It is calculated as the largest decline from a previous capital peak within each simulated path.
Fees are deducted from both winning and losing trades based on the absolute value of current capital.
This calculator is an educational simulation tool. Results do not guarantee actual investment returns, and all investment decisions are your responsibility.
