Using the probability of BALSARA's bankruptcy as a reference, unravel EA performance from backtests (Part 2)

How to read Vulsala's Bankruptcy Probability Table

Valpara's bankruptcy probability table isn't just one; there are several prepared for each funding rate.

When you search on the internet, a バルサラの破産確率表 that does not include the funding rate is missing one element.

Be sure to use a bankruptcy probability table that satisfies all three elements.

Now, as an example, let's look at how to read the case of “funding rate 5%, win rate 50%, and average win/loss ratio 1.2.”

The red circled position is the funding rate.

Next, the blue portion represents the win rate.

Next, the brown portion is the average win/loss ratio.

The intersection with the white arrow is the bankruptcy probability for that EA.

In this case, it looks like 3.6% at first glance, but the background of the numbers is yellow.

This indicates a yellow warning.

In バルサラ's bankruptcy probability, “below 1% is considered a safe zone.”

Therefore, in this table, for visual clarity, bankruptcy probabilities are color-coded: 0% bankruptcy is green, 1% or less is light green, up to 10% is yellow for relatively higher-risk speculative funding management, near-bankruptcy is orange, and certain bankruptcy is red.

A list of other funding rate tables is also provided below, so please use them according to your own funding rate.

Four patterns of バルサラ's bankruptcy probability table

Bankruptcy probability table for 1% funding rate

A funding rate of 1% means you would go bankrupt after 100 consecutive losses, so it seems you hardly ever go bankrupt, but this table shows that if win rate is too poor or the win/loss ratio is poor, bankruptcy can occur.

Bankruptcy probability table for 2% funding rate

2% funding rate is recommended for investing.

Bankruptcy probability table for 5% funding rate

This is the 5% bankruptcy probability table used in the reading example.

Bankruptcy probability table for 10% funding rate

A funding rate of 10% means bankruptcy after 10 consecutive losses.