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Risk Management Patterns

Risk controls should be explicit and testable.

Position Sizing​

  • Use fixed risk per trade, not only fixed quantity.
  • Calculate quantity from stop distance and max loss budget.

Exposure Limits​

  • Max concurrent positions per strategy.
  • Max directional exposure across correlated symbols.

Cooldown and Frequency​

  • Introduce a cooldown after exits.
  • Limit new entries per time window.

Execution Guardrails​

  • Require valid stop-loss for each entry.
  • Block orders during dependency outages.
  • Disable live execution quickly via config switch.

Review Cycle​

  • Re-evaluate limits after volatility regime changes.
  • Keep a changelog for risk parameter updates.