Math Is Fun Forum

Hi there, I came across this Ruin Matrix in my Pschology of Trading. It was given to me as a table; however, I am interested in generating this table from scratch. Can you help me out?

Profit/Loss Ratio - P/R
Winning Percentage - % Win

Please see the table below

             % winner
P/R     30%     40%     50%    60%   
__________________________________
1:1       99       88         50       12
2:1       74       14          2        0
3:1       23       5            1        0
4:1       14       5            1        0

* Ruin is defined as a 50% drawdown from starting equity

To use the above table - say you win $1 for every $1 that you bet, then your P/R is 1:1. If you have 50% winner then you would have 50% chance of losing half of your money. However, if you have 60% winners then you would only have 12% of losing half of your money.

Say if you win $2 for every $1 that you bet, then your P/R is 2:1. If you have 50% winners then you would have only 2% of losing 50% of your money. However, if you have 60% winners then you would only have 0% chance of losing 50% of you money.