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Trading Strategy Simulator

Your backtest shows one path. This simulator shows hundreds. Enter your win rate, average win, average loss and risk per trade, and see the range of equity curves, the drawdowns and the losing streaks your strategy can produce just from luck.

  • Free
  • No signup
  • Runs in your browser

Median final equity

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Chance of profit

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Typical max drawdown

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Bad-luck drawdown (1 in 20)

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Longest losing streak

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Expectancy

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Possible futures for your account

  • Median run
  • Middle 50% of runs
  • Middle 90% of runs
  • Individual runs

Each faint line is one possible path. Hover to read the spread after any number of trades.

What the simulator does

A strategy is defined by a few numbers: how often it wins, how much a typical winner makes, how much a typical loser costs, and how much of your account you risk per trade. Those four numbers fix the average outcome. They do not fix the path. Two traders with the same strategy can have very different years, because the order of wins and losses is random.

This tool runs a Monte Carlo simulation. It plays your strategy forward many times, drawing each trade as a win or a loss with the probability you entered, and records what happens to the account. The results show the realistic spread of outcomes, not just the average.

How to read the results

  • Equity curves. The bold line is the median run. The shaded bands hold the middle 50% and the middle 90% of runs. A wide band means your results depend heavily on luck.
  • Chance of profit. The share of runs that ended above your starting capital after the number of trades you chose.
  • Typical and bad-luck drawdown. The largest peak-to-trough fall in each run. The "1 in 20" figure is the 95th percentile: one run in twenty did worse.
  • Longest losing streak. The most consecutive losing trades in each run. Even a profitable strategy produces streaks that feel like it has stopped working.

Assumptions

Every trade is independent, wins and losses are fixed multiples of the amount risked, and the win rate does not change. Real markets have clusters of volatility, changing conditions and costs that this model does not capture. Treat the output as a stress test of your numbers, not a forecast.

The math

For each trade the account is multiplied by a growth factor. With risk r (as a share of equity), average win W and average loss L, both in multiples of the risk:

win: equity × (1 + r × W)
loss: equity × (1 − r × L)When compounding is off, risk is a fixed share of your starting capital and trades add or subtract fixed amounts.

The expected result of one trade, in units of risk (R), is the expectancy:

E = p × W − (1 − p) × Lp is the win rate. Positive expectancy is required for the median account to grow.

With compounding, the typical (median) account after n trades is close to equity × exp(n × g), where the average log growth per trade is g = p × ln(1 + rW) + (1 − p) × ln(1 − rL). The simulator reproduces this and shows the spread around it.

Worked examples

A 45% win rate with 1.5R winners

You win 45% of trades, winners pay 1.5 times your risk and losers cost exactly 1 times. You risk 1% per trade on a $10,000 account over 200 trades. The expectancy is +0.125R per trade. The simulation of 1,000 runs shows:

$12,642Median final equity
92%Chance of profit
12%Typical max drawdown
21%1-in-20 drawdown
8 tradesTypical longest losing streak

The same strategy at 3% risk

Nothing changes except the size. Risking 3% per trade instead of 1% raises the median outcome, but the ride gets rough. The 1-in-20 drawdown more than doubles.

$18,423Median final equity
89%Chance of profit
32%Typical max drawdown
53%1-in-20 drawdown

A trend follower wins only 35% of the time

Low win rate, big winners: 35% wins at 3R. Expectancy is +0.4R per trade, higher than the first example, yet the strategy loses 65% of its trades. The typical longest losing streak is 10 trades, and one run in twenty sees 16 or more.

$21,438Median final equity
100%Chance of profit
10 lossesTypical longest streak
16+ losses1-in-20 streak

Frequently asked questions

How many trades should I simulate?

Use the number you expect to take in the period you care about, for example a year. For a stable view of long-run behaviour use 500 to 1,000 trades. Fewer trades means more luck in the result, which the wider bands will show.

What is a good win rate and average win?

There is no single good number. What matters is expectancy, which combines both. A 35% win rate with 3R winners and a 70% win rate with 0.5R winners can be equally profitable. Use the risk and reward calculator to see where your numbers sit against break-even.

Why does my live trading look worse than the simulation?

Common reasons: your inputs are optimistic, trades are not independent (losses cluster), costs and slippage are larger than assumed, or the edge faded. Run the simulator with a slightly lower win rate and a loss of 1.1R to see how sensitive your results are.

What does a 1-in-20 drawdown mean?

In 5% of simulated runs the drawdown was at least that deep. It is a reasonable bad-luck scenario to plan for, not the worst case. Worse outcomes are possible.

Should I compound?

Compounding grows risk as the account grows and shrinks it after losses. It increases both the upside and the drawdowns. Turn it off to see results with fixed-size risk.

Does this predict my future results?

No. It shows what your assumptions imply, including the role of luck. It cannot tell you whether your assumptions are right. Use it to size risk and set expectations, not to forecast profit.

a.b

Built by a.b. I have published trading indicators on TradingView since 2015. These tools use the same standards: clear logic, no hidden assumptions. Message me on TradingView chat with feedback or a tool you would like to see.

Last updated October 2026. For education only. Not financial advice. Results depend on your inputs and cannot predict future performance.