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Risk Management

Effective risk management is crucial for successful automated trading. This guide covers essential principles and practices.

Core Principles​

1. Position Sizing​

  • Never risk more than 5% per trade
  • Keep 50% capital in reserve
  • Diversify across strategies

2. Stop Losses​

  • Set mental stop losses
  • Use strategy limits
  • Monitor drawdowns

3. Market Conditions​

  • Adapt to volatility
  • Pause during uncertainty
  • Review performance regularly

Risk by Strategy​

Low Risk​

  • Timed Buy (DCA)
  • TWAP orders
  • Small positions

Medium Risk​

  • Grid trading
  • Moderate positions
  • Active monitoring

High Risk​

  • Martingale
  • Large positions
  • Expert only

Best Practices​

  1. Start small and scale up
  2. Track all trades
  3. Review weekly performance
  4. Never invest more than you can afford to lose
  5. Keep emotions out of trading

Remember: Capital preservation is key to long-term success!