Methodology

Concepts and definitions

Definitions of risk-management concepts, position-sizing methods, risk and risk-adjusted metrics, and portfolio/options/algorithmic risk follow established risk-management, quantitative-finance and statistics literature and reputable practitioner sources. Where a term is used loosely in the industry, we state the precise meaning we adopt and flag ambiguity.

Formulas and calculators

Where we present formulas (risk per trade, the Kelly criterion, risk of ruin, maximum drawdown and its recovery, Sharpe, Sortino and Calmar ratios, Value at Risk, portfolio volatility), we use the standard textbook definitions and show the assumptions. The client-side calculators implement these formulas directly and run entirely in your browser; results are illustrative and exclude real-world charges (STT, brokerage, slippage) and margin unless stated.

Examples

Examples use Indian-market context — NSE instruments such as Nifty and Bank Nifty, INR amounts, lot sizes and SPAN+exposure margin, with round illustrative figures for clarity. They are teaching scenarios, not live data or recommendations.

Limitations

All figures and diagrams are educational approximations. Methods such as the Kelly criterion, Value at Risk and correlation-based portfolio risk rest on assumptions (a known edge, stable distributions, stable correlations) that rarely hold exactly in live markets and break precisely in a crisis. Nothing here guarantees an outcome. See our Sources.

Last updated 12 July 2026.