How the Prop Firm Pass Rate Calculator Works:

The Prop Firm Pass Rate Calculator uses a Monte Carlo simulation to clearly estimate how likely you are to pass a prop firm challenge based on your trading statistics. Because of this, the prop firm pass rate calculator gives traders a realistic view of their performance potential before they take an evaluation.

Inputs used by the calculator include:
Risk to reward ratio
Risk per trade
Win rate
Max drawdown
Profit target

How the Monte Carlo Simulation Works

First, the simulation starts with a balance of 0. Then, for each trade, it randomly determines whether the trade is a win or loss based on your win rate. If the trade wins, the simulation adds your risk multiplied by the risk to reward ratio to the balance. However, if the trade loses, it subtracts the risk amount instead.

The simulation continues placing trades until one of the following happens:
A. The balance reaches the profit target, which counts as a pass.
B. The balance falls below the max drawdown, which counts as a fail.
C. The simulation hits a maximum trade limit so it does not run endlessly.

After that, the prop firm pass rate calculator repeats this sequence thousands of times. As a result, it can estimate the true probability of passing a prop firm challenge.

Output generated:
Pass rate equals the percentage of simulations that hit the profit target.
Average trades to pass equals the average number of trades required in the simulations that successfully passed.

Optimal Risk Suggestion

In addition, the calculator includes an optimized risk feature. To find the best risk per trade, it tests many different risk levels between point three percent and two percent. For each level, it runs the same Monte Carlo simulation described above. It then records the pass rate and the number of trades needed.

Next, the calculator scores the results by prioritizing higher pass rates and fewer required trades. The risk level with the best score becomes the suggested risk setting.

Final output includes:
Suggested risk per trade
Expected pass rate at this risk level
Expected number of trades needed