The Ruin Formula and Why Sizing Matters
Even a 60% win-rate system will inevitably face 5 to 7 consecutive losses across a 100-trade sample. If you risk 5% per trade, you will lose a catastrophic 30%+ of your capital during drawdowns.
By capping risk strictly at 1% to 1.5% per trade, your drawdown is smoothed, protecting psychological capital and compounding capability.