Before you start
Have your trading capital, a number of trades to model, and realistic estimates of win rate and reward relative to risk. The calculator is an objective-based risk model, not an instrument-specific lot-size calculator.
Enter your system assumptions
Enter Trading capital and Number of trades, then set Win rate and Risk / reward ratio. Use evidence from your own records where possible rather than choosing inputs to produce a desired return.
Set the risk per trade
Adjust Risk per trade. The 1R risk amount is the planned dollar risk for one trade. For example, 1% of $10,000 is $100; this example illustrates the calculation, not a recommended risk level.
Run the simulation
Set Monte Carlo runs and choose Recalculate. Read the expected return, expectancy, example equity curve and drawdown distribution together.
Compare return with downside
Change the risk percentage and recalculate. Review p95 maximum drawdown as well as expected return. The p95 figure is a percentile within the simulated scenarios, not a maximum possible live loss.
Using 1R with a live position
Once you have chosen a risk amount, live position size still depends on stop distance, instrument specifications, account currency and trading costs. Do not treat the 1R dollar amount as a number of lots.