Risk Simulation
Drawdown Simulation & Risk Modeling Tool
Simulate worst-case equity drawdowns. Learn how randomized sequences calculate account ruin boundaries.
01. The Math of Drawdown Cycles
Drawdown is the distance between your equity peak and its lowest trough. Focus backtest analytics on maximum peak drawdown to verify strategy robustness.
02. Understanding Sequence of Returns Risk
Even with a 60% win rate, a random sequence can cluster 8 losses at the start. Managing this sequence risk requires conservative position sizing.
03. Calculating Capital Recovery Sizing
Recovering from a 50% loss requires a 100% gain. Keep drawdowns below 15% so recovery requires less than an 18% return.