Trade Scenario Outcome Simulator
Before entering any trade, know exactly what you're signing up for. This simulator projects your profit and loss across three scenarios: what happens if things go well, go as expected, or go wrong. Visualize the range of outcomes before committing capital.
Set realistic price targets for best, base, and worst cases. See how leverage amplifies both gains and losses, and understand the full spectrum of potential outcomes.
Use 1 for spot positions
Price Movement Scenarios
Use negative values for drops
Best Case Scenario
Price at $120.00
+$200.00
Base Case Scenario
Price at $105.00
+$50.00
Worst Case Scenario
Price at $85.00
$-150.00
P&L by Scenario
Balance Trajectories
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Calculation Methodology
This tool simulates different price movement scenarios to show potential outcomes. It calculates PnL for best, base, and worst-case price moves, showing returns relative to your actual capital at risk.
Key Insight: Leverage amplifies returns on margin, not position size. A $1,000 position at 5x leverage uses $200 margin. A 10% move = $100 PnL, which is 50% return on margin but only 10% on position size. This is why leverage is powerful but dangerous.
Learn more about position sizing:
Position sizing guideExample Scenario
Setup: $1,000 position, 5x leverage, 10% price move
What this means: A 10% price move generates $100 profit. On your $200 margin, that's a 50% return. The chart shows how returns scale with different price moves.
Warning: The same leverage that gives 50% gains on 10% moves also gives 50% losses on -10% moves. Always consider worst-case scenarios.
Common Mistakes & Warnings
- ⚠Being too optimistic on best case: Best-case scenarios rarely happen. Base your decisions on base-case outcomes, not best-case dreams.
- ⚠Not considering worst case seriously: Worst-case scenarios happen more often than you think. If worst case wipes you out, don't take the trade.
- ⚠Forgetting leverage amplifies losses: 5x leverage means 5x losses too. A -10% move = -50% on margin. Can you survive that?
- ⚠Not accounting for fees: Trading fees (0.1-0.2%) reduce returns. A 10% move becomes 9.8% after fees. Factor this in.
- ⚠Ignoring funding costs: On perps, funding costs reduce returns over time. A 7-day hold can cost 0.5-1% in funding.
Example Scenarios
Try these realistic scenarios to understand potential outcomes at different price levels.
Scenario 1: Conservative Price Moves
Small price movements with moderate leverage. Realistic expectations.
Step-by-Step Calculation:
- Margin: $1,000 ÷ 5 = $200
- Units: $1,000 ÷ $50,000 = 0.02 BTC
- Best case (+5%): (0.02 × $52,500) - $1,000 = +$50 PnL, +25% on margin
- Base case (+2%): (0.02 × $51,000) - $1,000 = +$20 PnL, +10% on margin
- Worst case (-2%): (0.02 × $49,000) - $1,000 = -$20 PnL, -10% on margin
What this means: With 5x leverage, a 5% price move gives 25% return on margin. Base case (2% move) gives 10% return. Worst case (-2%) loses 10%. This shows realistic outcomes for moderate leverage.
Scenario 2: Moderate Price Moves
Standard price movements with 10x leverage. Common trading scenarios.
Step-by-Step Calculation:
- Margin: $5,000 ÷ 10 = $500
- Units: $5,000 ÷ $50,000 = 0.1 BTC
- Best case (+10%): (0.1 × $55,000) - $5,000 = +$500 PnL, +100% on margin
- Base case (+5%): (0.1 × $52,500) - $5,000 = +$250 PnL, +50% on margin
- Worst case (-5%): (0.1 × $47,500) - $5,000 = -$250 PnL, -50% on margin
What this means: With 10x leverage, a 10% price move doubles your margin (100% return). Base case (5% move) gives 50% return. Worst case (-5%) loses 50%. This shows the power and danger of leverage - gains and losses are amplified equally.
Scenario 3: Aggressive Price Moves
Large price movements with high leverage. Extreme outcomes. ⚠️ High risk
Step-by-Step Calculation:
- Margin: $10,000 ÷ 20 = $500
- Units: $10,000 ÷ $50,000 = 0.2 BTC
- Best case (+20%): (0.2 × $60,000) - $10,000 = +$2,000 PnL, +400% on margin
- Base case (+10%): (0.2 × $55,000) - $10,000 = +$1,000 PnL, +200% on margin
- Worst case (-10%): (0.2 × $45,000) - $10,000 = -$1,000 PnL, -200% on margin
What this means: With 20x leverage, a 20% price move gives 400% return on margin. Base case (10% move) gives 200% return. Worst case (-10%) loses 200% - meaning you'd be liquidated before reaching -10% (liquidation is around -5% at 20x).
Edge Case Warning: At 20x leverage, liquidation occurs around -5% price move. The -10% worst case scenario would liquidate you before it happens. High leverage makes worst-case scenarios impossible to survive.
What If Variations
Explore how changing parameters affects outcomes:
What if I'm short instead of long?
Using Scenario 2: Best case becomes -10% (price drops), worst case becomes +5% (price rises). Returns are inverted. Shorts profit from downward moves, lose from upward moves.
What if leverage is 50x instead of 10x?
Using Scenario 2: Margin drops from $500 to $100. Best case (+10%) gives 500% return instead of 100%. Worst case (-5%) loses 250% instead of 50% - but you'd be liquidated before -5% at 50x.
What if price moves 15% instead of 10%?
Using Scenario 2: Best case becomes +150% return (15% × 10x). Worst case becomes -150% return (-15% × 10x). Larger moves amplify returns proportionally, but also increase liquidation risk.
Frequently Asked Questions
When should I use this tool?
Use this tool before entering any significant trade to visualize potential outcomes. It helps you assess risk/reward, set realistic expectations, and identify if a trade is worth taking. Especially useful for swing trades, leveraged positions, or when you're uncertain about direction.
What is scenario analysis?
Scenario analysis helps you understand potential outcomes before entering a trade. By defining best, base, and worst cases, you can assess if the risk/reward makes sense. It forces you to think about what could go wrong, not just what could go right.
How should I set my scenarios?
Base case should reflect your most likely expectation based on technical analysis, fundamentals, or historical patterns. Best and worst should represent realistic extremes based on recent volatility, support/resistance levels, or similar historical moves. Don't just guess round numbers — use actual price levels.
Should I use leverage in scenario analysis?
Yes — scenario analysis with leverage shows how amplified your returns (and losses) will be. It helps set realistic expectations. A 10% move with 5x leverage becomes 50% — that's important to visualize before entering the trade.
What if all scenarios are positive?
Be cautious. If you can't imagine a losing scenario, you may be overconfident. Always include a realistic downside. Even the best trades can go wrong. If worst case is still positive, you're probably not being honest about risks.
Should I include fees?
This tool shows raw PnL. For accuracy, mentally subtract trading fees and potential funding costs from your expected outcomes. For leveraged positions, use the Funding Rate Impact Tool to estimate funding costs over your holding period.
How do I know if my scenarios are realistic?
Compare your scenarios to recent price action and volatility. If your 'worst case' is a 5% drop but the asset regularly moves 10% daily, you're being too optimistic. Use historical data, ATR, or recent price ranges as guides.
What if my risk/reward ratio is poor?
If worst case is -$1000 and best case is +$500, that's a bad risk/reward (1:0.5). You need at least 1:2 (risk $1 to make $2) for most strategies. If risk/reward is poor, either wait for a better entry, reduce position size, or skip the trade entirely.
Can I use this for multiple positions?
This tool analyzes one position at a time. For portfolio-level scenario analysis, use the Capital at Risk Calculator to see total exposure, then mentally apply scenarios to your overall portfolio. The Scenario tool helps with individual trade decisions.
How often should I update scenarios?
Update scenarios whenever price moves significantly, when new information emerges, or when your time horizon changes. Scenarios aren't static — as price moves, your best/base/worst cases should adjust. Re-evaluate before adding to positions.
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