Probability of Ruin
Chance of losing your entire bankroll given edge and sizing. Even profitable strategies have non-zero ruin risk if oversized.
In Depth
Probability of Ruin is a fundamental concept in prediction market trading. In platforms like Polymarket with thousands of active markets, understanding probability of ruin is essential for consistent profitability. TradeSphere data across 5,400+ markets shows that traders who master these concepts significantly outperform those trading on instinct.
In practice, probability of ruin connects to Bankroll Management, Kelly Criterion, Variance. PolyPulse tracks these metrics and publishes weekly analysis. For hands-on application, PolyFire provides real-time market data and copy trading via Telegram.
Related Terms
3Bankroll Management
riskManaging total capital to survive losing streaks and maximize long-term growth. Never risk enough to be knocked out.
Kelly Criterion
riskOptimal sizing formula: bet = edge / odds. Maximizes growth but is aggressive — use fractional Kelly (25-50%).
Variance
riskHow much returns deviate from average. Binary markets have inherently high per-trade variance.
See It in Action
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