Has anyone used this formula before?(adsbygoogle = window.adsbygoogle || []).push({});

www.trade2win.com/traderpedia/Risk_of_ruin

risk_of_ruin = ((1 - Edge)/(1 + Edge)) ^ Capital_Units

Edge is the probability of a win.

How is capital_units defined? Is it certain % of current balance or initial capital?

If p=0.5, e.g,fair coin toss,

how is the formula derived such that ROR always= 0.5/(1+0.5) or 1/3 of capital units?

Is there a rationale behind this?

Looking for a formula to work backwards for optimal bet size each round of bet , taking into account p,q,C,N where N = max consecutive/string of losses.

N is an important variable because total ruin can still occur even when p>0.5.

Related free ROR calculator

http://www.automated-trading-system...n-and-drawdown-

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# Kaufmann Risk of Ruin formula

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