Risk of ruin is the probability that random losing streaks reduce your equity to zero (or your minimum-viable threshold) before your strategy's positive expectancy has time to compound.
Even a profitable strategy can ruin you if sized too aggressively. A 60% win-rate, 1.5R average winners strategy sized at 10% per trade has a meaningful (single-digit %) ruin probability over 100 trades despite obviously positive expectancy on paper.
The Kelly criterion gives the mathematically-optimal sizing for a known edge. Most professional traders size at a fraction of Kelly (½-Kelly or ¼-Kelly) to dramatically reduce variance while keeping most of the compounded return — Kelly itself is unforgiving on edge overestimates.
Practical implication: position sizing trumps strategy selection. A great strategy sized too big is dangerous; a mediocre strategy sized conservatively is durable. Most retail accounts blow up from sizing, not from picking the wrong trades.