Strategy Simulator
The Trading Vault Strategy Simulator helps you stress test a trading strategy before you rely on it. It runs hundreds of Monte Carlo paths from your assumptions, then shows the range of possible equity curves, drawdowns, target outcomes and risk-of-ruin results.
Use it when you want to see more than a single expected return. The simulator makes the spread of outcomes visible, including the uncomfortable paths that can still happen even when a strategy has a positive edge.
Simulation parameters
The simulator runs 500 Monte Carlo paths each time you click Run Simulation.
Account setup
| Field | Description |
|---|---|
| Initial Capital | The starting balance for each simulated path. |
| Trades | The number of trades in each simulation path. |
Strategy edge
| Field | Description |
|---|---|
| Apply preset | Quickly loads conservative, balanced or aggressive sample assumptions. |
| Win Rate (%) | The chance of each simulated trade being a winner. |
| Average Win | The average winning trade measured in R. |
| Average Loss | The average losing trade measured in R. |
| Reward : Risk | Calculated automatically from average win divided by average loss. |
The preset buttons are starting points only. Adjust the assumptions to match your own trading data or the strategy you want to test.
Position sizing
| Field | Description |
|---|---|
| Risk Method | Choose Percent of Equity or Fixed Dollar Risk. |
| Risk per Trade | The percentage of current equity risked on each trade when using percent sizing. |
| Fixed Dollar Risk | The fixed amount risked on each trade when using fixed risk. |
Percent-of-equity sizing compounds the risk amount as the balance changes. Fixed-dollar sizing keeps the risk amount stable, limited by the remaining account balance.
Target balance
| Field | Description |
|---|---|
| Target Type | Choose Target Return or Target Balance. |
| Target Return | A percentage gain from initial capital. |
| Target Balance | A specific account balance target. |
When a target is set, the simulator reports how often the paths reached it and the median trade number where the target was reached.
Minimum balance
| Field | Description |
|---|---|
| Minimum Balance Type | Choose Percent of Initial Capital or Minimum Balance. |
| Percent of Initial Capital | A minimum balance expressed as a percentage of initial capital. |
| Minimum Balance | A specific balance used as the risk-of-ruin threshold. |
Risk of ruin is counted when a simulated path falls to or below the minimum balance at any point.
Results tabs
After running the simulation, use the result tabs to inspect:
| Tab | Description |
|---|---|
| Best Result | The path with the highest ending balance. |
| Most Probable | The median path by ending balance. |
| Worst Result | The path with the lowest ending balance. |
Each tab shows net profit, end balance, compounded return, total R, expectancy, realised win rate, profit factor, max drawdown, max consecutive wins, max consecutive losses, wins and losses.
Equity graph
The equity graph plots the best, most probable and worst paths on the same chart. If you set a target balance or minimum balance, those levels are also drawn so you can see where each path crosses them.
This is useful for understanding path dependency: two strategies can have similar headline expectancy but very different drawdown and recovery behavior.
Probability analysis
The probability cards group all simulation paths into outcome bands:
| Card | Meaning |
|---|---|
| Probability of Loss | Paths that finished below starting capital. |
| Probability of Small Gain (0-30%) | Paths that finished from 0% to 30% return. |
| Probability of Medium Gain (30-70%) | Paths that finished from 30% to 70% return. |
| Probability of Large Gain (70%+) | Paths that finished above 70% return. |
These probabilities are based on the 500 generated paths for the current run.
Distribution charts
The simulator includes two distribution views:
| Chart | Description |
|---|---|
| Terminal Balance Distribution | Shows where final balances landed across all paths, with percentile markers. |
| Drawdown Distribution | Shows the distribution of maximum drawdowns across all paths. |
The percentile cards show the 10th percentile, median and 90th percentile values, giving you a quick view of downside, middle and upside cases.
Target outcome and risk of ruin
If a target balance is configured, the Target Outcome section shows the percentage of paths that reached or finished above that target, plus target-related statistics.
If a minimum balance is configured, the Risk of Ruin section shows the percentage of paths that fell to or below that level, plus the median trade number where ruin occurred when applicable.
Sharing the simulator
Use Share to copy a link containing the current simulator assumptions. The shared link includes values such as win rate, average win and loss, risk method, trade count, initial capital, target settings and minimum balance settings.
Monte Carlo results are random, so a shared setup can produce slightly different paths each time it is run. Treat the simulator as a probability and planning tool, not a prediction of what will happen.
Position Size Calculator
Use the position size calculator to convert account risk, stop size, symbol details, lot size and currency conversion into a practical trade size.
Compound Growth Calculator
Use the compound growth calculator to model trading account growth with compounding periods, recurring deposits, withdrawals, goal targets and projection tables.