How to Use the Calculator

Input Your Core Parameters

Locate the Parameters panel on the left side of the dashboard. You must input four specific metrics based on your historical trading data:

• Trade Win Rate (%): Your historical percentage of winning trades.
• Reward-to-Risk Ratio: Your average winning trade divided by your average losing trade.
• Total Capital ($): The total liquid bankroll you are dedicating to this strategy.
• Stop Loss Limit (%): The maximum portfolio drawdown you are willing to tolerate before halting trading.

Verify the Expected Value (EV)

Once you click Calculate Edge, check the Expected Value output box. If the number is Red and negative, stop immediately—your strategy loses money over time. If the number is Green and positive, proceed to size your positions.

Select Your Fractional Kelly Size

The dashboard calculates three distinct position sizes based on your total capital:

• Full Kelly: The maximum mathematical size. Generates the highest returns but causes massive account volatility.
• Half Kelly: The industry standard. Risks 50% of the Full Kelly amount, drastically smoothing the equity curve while retaining high growth.
• Quarter Kelly: The institutional standard. The safest sizing tier, recommended for unproven algorithms or manual traders protecting capital.

Review Risk of Ruin & Growth Projections

Examine the Risk of Ruin percentage. This defines the exact probability of hitting your Stop Loss Limit if you trade the Full Kelly size.

Finally, review the Growth Expectancy Chart. This graph maps the median theoretical compounding trajectory of your bankroll across 100 consecutive trades, allowing you to visually compare the volatility of Full, Half, and Quarter Kelly position sizes.