i found there is something wrong with the definition in the book 'Smarter Trading' at the end of the Chapter 4,Mr. Kaufman gives a formula to calculate the Risk of Ruin(=ROR),but i feel puzzle about it: the formula is : MaxRisk := 0.1;-- it should be the percent of account AvgWin := AvgWinPct / 100; AvgLoss := AvgLossPct / 100; Z := winpct / 100 * ( AvgWin) - ( 1 - winpct /100 ) * abs( AvgLoss); A := sqrt( winpct / 100 * AvgWin * AvgWin + ( 1 - winpct /100 ) * AvgLoss * AvgLoss); PP := 0.5 * ( 1 + ( Z / A)); risk_of_ruin := power((( 1 - PP ) / PP ), MaxRisk / A); but: as a positive system,Z>0, and A must be positive,so PP > 0.5, so (1-PP)<0.5 so ( 1 - PP ) / PP )<1, and if A is fixed, (MaxRisk / A ) increases when Max Risk increases. as ( 1 - PP ) / PP )<1 ,so when (MaxRisk / A ) increases , risk of ruin becomes smaller, it means the more the capital i use in a positive system ,the less the risk of ruin , is it funny? what's wrong with it? or wrong with me? PS: the example in P68 is incorrect, the result of A should be 0.02 instead of 0.0605.