Risk Management Settings

Overview

NeuraTrade includes comprehensive risk management to protect your capital during autonomous trading. Risk settings control position sizing, loss limits, and emergency safeguards.

Risk settings are critical for safe autonomous trading. Start with conservative values and adjust based on your risk tolerance.

Risk Manager Configuration

Core Risk Parameters

max_portfolio_risk

number

default:"0.1"

Maximum percentage of portfolio at risk (0.0-1.0).Default: 0.1 (10% max portfolio risk)

{
  "max_portfolio_risk": 0.05  // 5% max risk
}

max_position_risk

number

default:"0.02"

Maximum percentage of position at risk per trade (0.0-1.0).Default: 0.02 (2% max position risk)

{
  "max_position_risk": 0.01  // 1% max risk per position
}

max_daily_loss

decimal

default:"100.00"

Maximum allowed daily loss in quote currency (USD).

{
  "max_daily_loss": "50.00"
}

max_drawdown

number

default:"0.15"

Maximum allowed drawdown percentage (0.0-1.0).Default: 0.15 (15% max drawdown)

{
  "max_drawdown": 0.10  // 10% max drawdown
}

Risk:Reward Configuration

min_risk_reward_ratio

number

default:"2.0"

Minimum risk:reward ratio for trade approval.Default: 2.0 (1:2 minimum ratio)A ratio of 2.0 means potential profit must be at least 2x the risk.

{
  "min_risk_reward_ratio": 3.0  // 1:3 minimum ratio
}

Position Limits

max_concurrent_trades

number

default:"5"

Maximum number of open positions allowed simultaneously.

{
  "max_concurrent_trades": 3
}

position_size_limit

decimal

default:"1000.00"

Maximum position size in quote currency (USD).

{
  "position_size_limit": "500.00"
}

Emergency Thresholds

emergency_threshold

number

default:"0.20"

Drawdown percentage that triggers emergency halt (0.0-1.0).Default: 0.20 (20% drawdown triggers emergency)

{
  "emergency_threshold": 0.15  // Emergency at 15% drawdown
}

consecutive_loss_limit

number

default:"3"

Maximum consecutive losses before automatic trading pause.

{
  "consecutive_loss_limit": 2
}

Daily Loss Tracker

The Daily Loss Tracker monitors cumulative losses within a 24-hour period.

Configuration

type DailyLossCapConfig struct {
    MaxDailyLoss decimal.Decimal
}

Environment Variable

# Set via risk manager config
MAX_DAILY_LOSS=100.00

Behavior

Tracks losses for each user/chat ID
Resets automatically after 24 hours (TTL)
Blocks trading when limit exceeded
Stored in Redis for persistence

API Usage

# Check current daily loss
curl http://localhost:58080/api/v1/risk/metrics

# Force resume (admin only)
curl -X POST http://localhost:58080/api/v1/admin/risk/force_resume \
  -H "X-API-Key: your_admin_key"

Consecutive Loss Tracker

Automatically pauses trading after consecutive losses.

Configuration

max_consecutive_losses

number

default:"3"

Number of consecutive losses that trigger pause.

pause_duration

duration

default:"15m"

How long trading is paused after consecutive losses.

PauseDuration: 30 * time.Minute  // 30 minute pause

Pause Mechanism

Redis Keys

risk:consecutive_loss:{userId}  # Loss counter (24h TTL)
risk:paused:{userId}           # Pause timestamp (15min TTL)

Position Size Throttle

Dynamically reduces position sizes after losses.

Configuration

reduction_factor

decimal

default:"0.7"

Multiplier applied to position size after each loss.

ReductionFactor: decimal.NewFromFloat(0.5)  // 50% reduction

min_position_multiplier

decimal

default:"0.1"

Minimum position size multiplier (floor).Prevents position size from going below 10% of original.

loss_threshold

number

default:"1"

Number of consecutive losses before throttling starts.

recovery_factor

decimal

default:"1.5"

Multiplier applied to position size after wins.

RecoveryFactor: decimal.NewFromFloat(1.3)  // 30% increase on win

Throttle Calculation

After Loss:
newMultiplier = currentMultiplier * reductionFactor^(losses - threshold + 1)

After Win:
newMultiplier = min(currentMultiplier * recoveryFactor, 1.0)

Effective Position Size:
effectiveSize = requestedSize * multiplier

Example

Initial position: $1000
Reduction factor: 0.7
Loss threshold: 1

Trade 1: Loss  → Multiplier = 0.7  → Position = $700
Trade 2: Loss  → Multiplier = 0.49 → Position = $490
Trade 3: Win   → Multiplier = 0.74 → Position = $740
Trade 4: Win   → Multiplier = 1.0  → Position = $1000 (recovered)

Drawdown Halt

Automatically halts trading when drawdown exceeds threshold.

Configuration via Environment

# Drawdown threshold for recovery-only mode
NEURATRADE_RECOVERY_DERISK_ONLY_DRAWDOWN=0.40  # 40%

# Force manual risk lock
NEURATRADE_QUEST_FORCE_RISK_LOCK=true

Halt Behavior

Monitor: Continuously track portfolio drawdown
Check: Compare against emergency_threshold
Halt: Stop all new trades when exceeded
Notify: Send alert via Telegram
Resume: Manual override required (admin API)

Resume Trading

# Force resume all halted accounts
curl -X POST http://localhost:58080/api/v1/admin/risk/force_resume \
  -H "X-API-Key: your_admin_key"

Response

{
  "success": true,
  "message": "Trading resumed for all halted accounts",
  "resumed_count": 3,
  "accounts": [
    "chat_123",
    "chat_456",
    "chat_789"
  ]
}

Portfolio Safety Service

Holistic portfolio risk assessment combining all risk components.

Safety Check Flow

Safety Response

{
  "trading_allowed": false,
  "reasons": [
    "Daily loss limit exceeded: $125/$100",
    "3 consecutive losses - trading paused for 12m"
  ],
  "risk_metrics": {
    "daily_loss": "125.00",
    "daily_loss_limit": "100.00",
    "consecutive_losses": 3,
    "position_multiplier": "0.49",
    "current_drawdown": 0.08,
    "max_drawdown": 0.15
  }
}

Risk Assessment Levels

Low

Score: 0.0-0.2Normal trading allowed

Medium

Score: 0.2-0.5Warnings issued, monitor closely

High

Score: 0.5-0.8Reduce positions, avoid new trades

Extreme

Score: 0.8-1.0Emergency halt, close positions

Risk Actions

Approve

Trade is approved with no restrictions.

{
  "action": "approve",
  "risk_level": "low",
  "score": 0.15
}

Warning

Trade is approved but with caution flags.

{
  "action": "warning",
  "risk_level": "medium",
  "score": 0.35,
  "recommendations": [
    "Monitor position closely",
    "Consider tighter stop-loss"
  ]
}

Reduce

Position size must be reduced.

{
  "action": "reduce",
  "risk_level": "high",
  "score": 0.65,
  "max_position_size": "500.00",
  "recommendations": [
    "Reduce position to max $500"
  ]
}

Block

Trade is rejected due to high risk.

{
  "action": "block",
  "risk_level": "high",
  "score": 0.75,
  "reasons": [
    "Portfolio risk exceeds maximum threshold"
  ]
}

Emergency

Emergency halt triggered.

{
  "action": "emergency",
  "risk_level": "extreme",
  "score": 1.0,
  "reasons": [
    "Drawdown 22% exceeds emergency threshold 20%"
  ],
  "recommendations": [
    "EMERGENCY: All positions should be closed immediately",
    "Halt all trading activity",
    "Review strategy before resuming"
  ]
}

Configuration Examples

Conservative (Default)

RiskManagerConfig{
    MaxPortfolioRisk:     0.1,    // 10% max portfolio risk
    MaxPositionRisk:      0.02,   // 2% max per position
    MaxDailyLoss:         decimal.NewFromFloat(100),
    MaxDrawdown:          0.15,   // 15% max drawdown
    MinRiskRewardRatio:   2.0,    // 1:2 minimum
    MaxConcurrentTrades:  5,
    EmergencyThreshold:   0.20,   // 20% emergency halt
    ConsecutiveLossLimit: 3,
    PositionSizeLimit:    decimal.NewFromFloat(1000),
}

Aggressive

RiskManagerConfig{
    MaxPortfolioRisk:     0.2,    // 20% max portfolio risk
    MaxPositionRisk:      0.05,   // 5% max per position
    MaxDailyLoss:         decimal.NewFromFloat(500),
    MaxDrawdown:          0.25,   // 25% max drawdown
    MinRiskRewardRatio:   1.5,    // 1:1.5 minimum
    MaxConcurrentTrades:  10,
    EmergencyThreshold:   0.30,   // 30% emergency halt
    ConsecutiveLossLimit: 5,
    PositionSizeLimit:    decimal.NewFromFloat(5000),
}

Ultra-Conservative

RiskManagerConfig{
    MaxPortfolioRisk:     0.05,   // 5% max portfolio risk
    MaxPositionRisk:      0.01,   // 1% max per position
    MaxDailyLoss:         decimal.NewFromFloat(50),
    MaxDrawdown:          0.10,   // 10% max drawdown
    MinRiskRewardRatio:   3.0,    // 1:3 minimum
    MaxConcurrentTrades:  3,
    EmergencyThreshold:   0.12,   // 12% emergency halt
    ConsecutiveLossLimit: 2,
    PositionSizeLimit:    decimal.NewFromFloat(500),
}

Monitoring Risk Metrics

Get Risk Metrics

curl http://localhost:58080/api/v1/risk/metrics

Response

{
  "total_assessments": 145,
  "approved_trades": 98,
  "blocked_trades": 32,
  "warnings_issued": 15,
  "emergency_triggers": 0,
  "assessments_by_role": {
    "portfolio": 45,
    "position": 67,
    "trading": 33
  },
  "current_metrics": {
    "daily_loss": "45.30",
    "daily_loss_limit": "100.00",
    "consecutive_losses": 1,
    "position_multiplier": "0.7",
    "current_drawdown": 0.05,
    "max_drawdown": 0.15,
    "paused": false
  }
}

Best Practices

Start Conservative: Use default settings or ultra-conservative config
Paper Trade First: Test risk settings in paper trading mode
Monitor Daily: Check risk metrics dashboard daily
Adjust Gradually: Increase limits slowly based on performance
Set Alerts: Configure Telegram notifications for risk events
Review Weekly: Analyze risk assessments and adjust thresholds
Emergency Plan: Know how to force resume or halt trading
Diversify: Don’t exceed position limits even if allowed

Troubleshooting

Trading Blocked by Risk Manager

# Check current risk status
curl http://localhost:58080/api/v1/risk/metrics

# Check specific reasons
# Look for:
# - Daily loss exceeded
# - Consecutive losses
# - Position size throttle
# - Drawdown threshold

# Force resume if appropriate (admin only)
curl -X POST http://localhost:58080/api/v1/admin/risk/force_resume \
  -H "X-API-Key: your_admin_key"

Unexpected Position Size Reduction

Check position size throttle status:

# In application logs, look for:
"Position size reduced by X% due to recent losses"

# Throttle recovers automatically after wins
# Or reset manually via admin API

Get Started

Core Features

Configuration

Guides

​Overview

​Risk Manager Configuration

​Core Risk Parameters

​Risk:Reward Configuration

​Position Limits

​Emergency Thresholds

​Daily Loss Tracker

​Configuration

​Environment Variable

​Behavior

​API Usage

​Consecutive Loss Tracker

​Configuration

​Pause Mechanism

​Redis Keys

​Position Size Throttle

​Configuration

​Throttle Calculation

​Example

​Drawdown Halt

​Configuration via Environment

​Halt Behavior

​Resume Trading

​Portfolio Safety Service

​Safety Check Flow

​Safety Response

​Risk Assessment Levels

Low

Medium

High

Extreme

​Risk Actions

​Configuration Examples

​Conservative (Default)

​Aggressive

​Ultra-Conservative

​Monitoring Risk Metrics

​Get Risk Metrics

​Best Practices

​Troubleshooting

Build docs developers (and LLMs) love

Overview

Risk Manager Configuration

Core Risk Parameters

Risk:Reward Configuration

Position Limits

Emergency Thresholds

Daily Loss Tracker

Configuration

Environment Variable

Behavior

API Usage

Consecutive Loss Tracker

Configuration

Pause Mechanism

Redis Keys

Position Size Throttle

Configuration

Throttle Calculation

Example

Drawdown Halt

Configuration via Environment

Halt Behavior

Resume Trading

Portfolio Safety Service

Safety Check Flow

Safety Response

Risk Assessment Levels

Risk Actions

Configuration Examples

Conservative (Default)

Aggressive

Ultra-Conservative

Monitoring Risk Metrics

Get Risk Metrics

Best Practices

Troubleshooting