Monte Carlo Simulator | Know Your Probability of Success Before You Trade

Hope Is Not a Strategy

"I think my strategy will work." "I feel like I have an edge." "It should be profitable over time."

These are the words of traders who blow up their accounts.

Monte Carlo simulation replaces hope with math.

It runs your strategy thousands of times with randomized outcomes to show you:

• What's the probability you'll make money?
• What's the probability you'll blow up?
• What's your expected drawdown?
• What range of outcomes should you expect?

This is how professionals think about risk.

What Is Monte Carlo Simulation?

Instead of asking "Will I win?", Monte Carlo asks "What are all the possible outcomes?"

It takes your trading statistics (win rate, average win, average loss) and runs 200 simulated trading sequences of 100 trades each.

Some simulations get lucky. Some get unlucky. Most fall somewhere in between.

The result? A probability distribution of outcomes.

You'll know:

• 78% chance of profit (not "I hope I profit")
• 34% chance of gaining 50%+ (not "maybe I'll double")
• 2.5% chance of ruin (not "I'll probably be fine")

What's Inside

📊 7 Professional Sheets with 21,000+ formulas:

① Dashboard

• Key probabilities at a glance
• P(Profit), P(+20%), P(+50%), P(Double), P(Ruin)
• Outcome distribution (median, best case, worst case)
• Mathematical edge calculation
• Drawdown analysis
• Confidence intervals
• Clear verdict: ✅ Positive Edge or ❌ Negative Edge

② Inputs

• Enter your trading statistics
• Starting capital, win rate, avg win, avg loss
• Auto-calculates expected value, Kelly criterion
• Sees your edge instantly

③ Simulation Engine

• 200 simulated equity paths
• 100 trades per simulation
• 20,000 individual trade outcomes
• Press F9 to regenerate

④ Risk Analysis

• Final value for each simulation
• Maximum drawdown experienced
• Return percentage
• Summary statistics

⑤ Distribution

• Histogram of final account values
• See the spread of outcomes
• Data bars for visual analysis

⑥ Compare Strategies

• Test 3 strategies side by side
• Higher win rate vs bigger wins?
• Find the highest expected value

⑦ How To Use

• Step-by-step instructions
• Key metrics explained

Key Metrics Calculated

Metric -------------------- What It Tells You

P(Profit) ---------- Chance you end up ahead

P(Ruin) ---------- Chance you lose 50%+ (catastrophic)

Median Outcome ---------- Most likely result

5th Percentile ---------- Worst case (bad luck)

95th Percentile ---------- Best case (good luck)

Max Drawdown ---------- Largest peak-to-trough drop

Expected Value ---------- Average profit per trade

Kelly Criterion ---------- Optimal position size

Why 200 Simulations?

With 200 paths of 100 trades each, you're seeing 20,000 individual trade outcomes.

That's enough to:

• Smooth out randomness
• See the true distribution
• Identify tail risks
• Make confident decisions

And the spreadsheet recalculates instantly when you press F9.

The Power of Probability Thinking

Amateur thinking: "I have a 65% win rate and make $150 on wins, lose $200 on losses. I should be profitable."

Professional thinking: "With those stats, I have a 78% probability of profit after 100 trades, but a 2.5% chance of losing half my account. My expected drawdown is 18%. I should size positions to survive the variance."

Same strategy. Completely different understanding of risk.

Perfect For

✅ Options traders testing new strategies

✅ Anyone who wants to understand their real risk

✅ Traders who've blown up accounts and want to prevent it

✅ Systematic traders building robust systems

✅ Anyone tired of hoping and ready to know

How It Works

1. Enter your stats — Win rate, avg win, avg loss (from your journal or backtest)
2. View probabilities — See your true odds of success
3. Analyze risk — Understand your drawdown exposure
4. Compare strategies — Find the highest expected value approach
5. Make better decisions — Size positions for survival

Regenerate Simulations

Press F9 (Windows) or Cmd+= (Mac) to run new simulations.

Each time you regenerate, you'll see different paths — that's the point! The probabilities should stay roughly consistent, which validates your edge.

If probabilities swing wildly, you need more trades in your sample.

FAQ

Q: Where do I get my trading statistics? A: From your trade journal or backtest results. Use real data, not guesses.

Q: Why do results change when I press F9? A: That's Monte Carlo working! Each simulation is random. The probabilities should stay similar — that's your true edge.

Q: What's a "safe" probability of ruin? A: Under 5% is acceptable. Under 1% is ideal. Above 10% means you're oversized.

Q: Can I change the number of simulations? A: The spreadsheet is optimized for 200 simulations. More would slow down Excel significantly.