Glossary/ Risk
Risk
Risk of ruin
The probability that a run of losses takes your capital below the point where you can continue. It rises sharply with position size.
Where this comes up
Lessons that use the term in context, which is usually more useful than the definition on its own.
- Risk of ruin — The probability nobody calculates before they need it.
Nearby terms
Leverage · Position sizing · Reward to risk · Slippage · Stop loss · Average down