How to Calculate Ruin Factor

The ruin factor is a parameter which measures the risk of losing all available funds after a series of stock operations. This is the formula to calculate the ruin factor:

Ruin factor = ( 1 - Winning percentage ) Risked capital (%)
Winning percentage

For example, if the system wins 45% of the operations, and 10% of the capital is risked, the formula to calculate the ruin factor is:

Ruin factor = ( 1 - 0,45 ) 10
0,45
Ruin factor = 7,43%
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