Can someone please show me the simple math for this formula?

risk_of_ruin = ((1 – Edge)/(1 + Edge)) ^ Capital_Units

I can't get the numbers to come out properly. I would really appreciate it if someone would break it down for me step by step.

Let's say I have a 2:1 risk/reward ratio and I win 35% of the time. Each trade I risk 10% of my capital. The chart says I have a 60.8% chance of losing all my capital. Problem is I have no clue how this is calculated and can't find anywhere to explain it simply. Everyone assumes I know what EDGE and Capital_Units are and I don't.

Here's where I see the chart: http://2ndskiesforex.com/trade-signa...-risk-of-ruin/

Please someone help me before I lose my mind over here.

Merry Christmas Ya Filthy Animals

risk_of_ruin = ((1 – Edge)/(1 + Edge)) ^ Capital_Units

I can't get the numbers to come out properly. I would really appreciate it if someone would break it down for me step by step.

Let's say I have a 2:1 risk/reward ratio and I win 35% of the time. Each trade I risk 10% of my capital. The chart says I have a 60.8% chance of losing all my capital. Problem is I have no clue how this is calculated and can't find anywhere to explain it simply. Everyone assumes I know what EDGE and Capital_Units are and I don't.

Here's where I see the chart: http://2ndskiesforex.com/trade-signa...-risk-of-ruin/

Please someone help me before I lose my mind over here.

Merry Christmas Ya Filthy Animals