But that's just it moneyline, it should apply to forex trading as well.

WR could be the average number of pips you earn per 100 trades
s could be the standard deviation for the pips you earn per 100 trades

That formula (should) then tell you what your required balance should be to not go broke 99.7% of the time.

I haven't actually gone more in depth into this, it is just something I have been mulling over the past couple weeks. See I come from a successful stint at poker and am now learning about Forex trading (much more long term potential here). Much of the same money management concepts still apply, because it's just statistics (not to mention the psychological aspects but that's another story).

Coming up with an accurate WR and s could prove tricky though. In poker we would use it with real data, much of what we have in Forex trading is unreliable backtesting data. But I guess it could be a start?

Basically the formula boils down to the fact that the more reliable your trading system, the higher risk you can take without going bankrupt.

As for the carat (^), it's means "raised to the power of". So it's standard deviation raised to the power of 2, or standard deviation squared, or standard deviation multiplied by standard deviation.