ARMFRisk calculators for trading
You need more than one risk calculator in trading: the six calculations below cover the whole decision path — from the size of a specific trade to an assessment of the system over distance. All of them calculate in the browser, send nothing to a server and show the formula in full — it can be carried over into your own spreadsheet and checked.
Where to start the calculation
The calculations are not equal: some answer the question «what to do in this trade», others «is this system worth trading at all». The order below matches the way decisions are actually made.
Whether it has positive expectancy including costs and what spread of results it gives over two hundred trades.
before the first tradeCheck the chosen percentage against the length of a losing streak and compare it with the upper bound given by the Kelly criterion.
onceThe risk-to-reward ratio including costs and the break-even win rate: whether the entry is worth bothering with.
before the entryThe lot for the stop distance and the pip value, with a check of the required margin.
before the entryHow much a drawdown will cost and how many trades the recovery will take.
continuouslyAll forex risk management calculators
Common assumptions
All calculations on the site are built on the same premises. They simplify reality, and it is better to know that in advance.
- Trades are treated as independent
- The model does not account for market regimes replacing one another and streaks clustering. In reality clustering makes long streaks slightly more likely than in the calculation.
- The share of winners and the ratio are constant
- Over distance they change. The calculation shows what happens if the parameters hold, not a forecast.
- The risk share is taken from current equity
- This matches the fixed-fraction rule. With a fixed lot the results will be different — usually worse in a drawdown.
- Costs are set explicitly
- Where they affect the result, there is a separate field for them. A calculation without costs is always more optimistic than a real account.
A detailed breakdown of the assumptions and the formulas is on the methodology page.
Frequently asked questions
How do these calculations differ from a spreadsheet?
In essence not at all: any risk management calculator in trading is a formula that can be written into a spreadsheet. The only difference is the speed of trying options: a slider shows how the result changes as the inputs change, while a formula in a spreadsheet computes one set at a time.
Do the numbers you enter go to a server?
No. The computation runs right on your device: while you move the sliders the page makes no network requests and remembers nothing except the ticks in the checklists — those live in the browser's local storage.
Why is there no automatic quote feed in the calculators?
The calculations do not depend on the current price — they need the stop distance and the pip value, which you take from your own terminal. Feeding in quotes would add a dependency on an external source without changing the result.
Can these calculations be repeated in a spreadsheet?
Yes, and that is the recommended way of working: the formulas are given on every page in full. A calculator is convenient for quickly trying options, a spreadsheet for regular calculations on your own trades.
Which calculator should a forex beginner start with?
With the lot calculation: it converts the risk percentage into a size and immediately shows whether the trade fits the deposit. Then the risk-to-reward ratio, to see whether the target justifies that risk.
Do the calculations suit crypto and stocks?
The formulas are universal, but the inputs are forex ones: size in lots, pip value, margin from leverage. For other markets you need to substitute your own contract size and price step value from the instrument specification.
Why is there no separate commission field in the calculators?
It is part of the costs field set as a share of risk: that way the calculation does not depend on whether the broker charges a commission per lot or builds it into the spread. Converting is simple: the spread plus the commission in pips, divided by the stop length.
Can Monte Carlo simulations be trusted?
As an estimate of the spread, yes; as a forecast, no. A simulation shows which outcomes are possible at the given win rate and ratio, but it assumes they do not change, and over distance they always do.
Is an internet connection needed for the calculators to work?
Only to load the page. After that the calculation runs in the browser: the sliders recompute the result on the spot, and nothing goes to the network or is saved.
What to do if the result looks implausible?
Check the inputs — most often the issue is the pip value or the units of the stop (pips against points). If the discrepancy remains, write to us: the formula is given on the page and the calculation is reproduced in a minute.
Read next
