The Risk-Reward Simulator lets you model the long-term outcome of a trading strategy based on its win rate and payoff ratio. This is an essential tool for understanding whether a strategy has a positive mathematical expectancy before you risk real money on it.
Enter your entry price, stop loss, take profit, win rate, and the number of trades you want to simulate. The simulator models the expected outcomes and shows you the range of possible results, helping you understand whether a strategy is worth pursuing.
This probabilistic approach is far more informative than a single backtest result. Even a profitable strategy can produce significant drawdowns due to the random clustering of losses. The simulator shows you the expected outcome, helping you understand the relationship between your win rate and reward-to-risk ratio.
You can adjust parameters in real time and see the results update instantly. For example, increasing your win rate by just 5% or improving your payoff ratio by 0.2 can dramatically change the long-term expectancy. This helps you understand which lever — win rate or reward-to-risk — has the biggest impact on your edge.
Your simulator settings are automatically saved between sessions, so you can pick up right where you left off. The Risk-Reward Simulator is available on Pro and Platinum plans.