Trading Simulator

How It Works

1. User Inputs and Customization

The simulator begins by letting users configure the following parameters:

1. Starting Capital ($):
   The initial balance to simulate trades with. This is the baseline amount from which all gains or losses are calculated.

2. Initial Risk Percentage (%):
   The percentage of the current balance that is risked per trade. This can change dynamically during the simulation based on balance thresholds and streak patterns.

3. Win Rate (%):
   The probability of a trade resulting in a win. This governs the outcome of each trade using random probability to reflect realistic win/loss distributions.

4. Number of Trades:
   Defines how many individual trades the simulator should run in one cycle.

5. Risk-to-Reward Ratio (RRR):
   Specifies how much profit is made on winning trades relative to the amount risked. For example, a 2:1 RRR means that for every $1 risked, $2 is earned on a win.

2. Trade Simulation Logic

For each simulated trade, the following steps occur:

Balance Tracking

The simulator calculates the current balance before the trade and dynamically adjusts the risk amount based on the user’s selected risk percentage.

Risk Adjustment Based on Balance Ranges

To model conservative trading behavior, the simulator adjusts the risk percentage depending on balance levels:

• $9800 – $10000: Risk remains at 2%

• $9600 – $9799: Risk is reduced to 1%

• $9400 – $9599: Risk is reduced to 0.5%

• $9200 – $9399: Risk is reduced to 0.25%

• $9001 – $9199: Risk is reduced to 0.1%

This feature prevents aggressive risking when the account is under stress and simulates more cautious trading during drawdowns.

Streak-Based Risk Adjustments

Risk percentage is also affected by trade streaks:

• After 2 Consecutive Wins: The risk percentage doubles, but never exceeds the initial value. This reflects more confident risk-taking during winning streaks.

• After 2 Consecutive Losses: The risk percentage is halved, down to a minimum of 0.01%, to simulate risk aversion in downturns.

Trade Outcome Calculation

Each trade is randomly assigned as a win or loss, based on the defined win rate. Then:

• Winning Trades: Profit is calculated as risk amount × RRR, and added to the balance.

• Losing Trades: Loss equals the risk amount, which is subtracted from the balance.

Real-Time Updates

For each trade, the simulator records:

• Trade number

• Result (Win/Loss)

• Risk % used

• Pre-trade balance

• Risk amount in dollars

• Profit/loss from the trade

• Post-trade equity (balance after the trade)

These values are dynamically inserted into an HTML table to give users a step-by-step overview of their simulated performance.

3. Final Results Display

Above the table, the simulator also displays the Final Balance, giving users a clear view of where they ended after all trades.

4. Equity Curve Visualization

The simulator features a responsive equity curve chart that visually plots the balance (equity) after each trade, helping users:

• Track performance trends

• Visualize drawdowns and recovery

• Understand volatility in their strategy

Use Cases

• Backtesting trading psychology and behavior

• Demonstrating the power of risk management and compounding

• Checking if your risk management protects your account during losing streaks.

• Practicing money management without financial risk
  

• Educating beginners on win rate, RRR, and risk per trade dynamics

Conclusion

This Trading Simulator offers a realistic, customizable environment to explore trading outcomes based on key risk and reward variables. By integrating dynamic risk adjustments, win/loss probabilities, and visual feedback, it serves as a valuable tool for traders to understand how strategies may perform over time in real market conditions—without the emotional and financial cost of live trading.