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%
