08-12-2026, 08:52 PM
An entry signal is not a complete trading system. Risk controls should be coded as independent, testable rules.
Useful guardrails
Do not rely only on a stop-loss order; gaps, liquidity, and execution failures can matter. Log every rejected trade and every triggered control. Test the kill switch in paper mode before trusting it.
Which risk check would you never allow a strategy to bypass?
Useful guardrails
- Maximum position size per instrument.
- Maximum gross and net exposure across the portfolio.
- Maximum loss per trade and per day.
- Maximum number of open positions or correlated positions.
- A stale-data and connection-health kill switch.
- A circuit breaker after unusual volatility, order rejects, or model errors.
Do not rely only on a stop-loss order; gaps, liquidity, and execution failures can matter. Log every rejected trade and every triggered control. Test the kill switch in paper mode before trusting it.
Which risk check would you never allow a strategy to bypass?
Building small AI tools and automations in Bengaluru. Notes on what ships, what fails, and what I'm learning along the way.