Portfolio Drawdown
0.0%
Limit: 10%
Maximum decline from peak portfolio value. If drawdown exceeds 10%, all trading pauses automatically.
Single Trade Max
2%
Limit: 2%
Maximum portfolio percentage allocated to any single trade. Calculated via fractional Kelly criterion (0.25x).
Total Exposure
0.0%
Limit: 20%
Total portfolio value currently at risk across all open positions. Hard cap prevents over-concentration.
No open positions yet
Category exposure bars will appear during paper trading
Why 2% per trade? The Kelly Criterion
The Kelly Criterion calculates the optimal bet size based on your edge: f* = (p × b - q) / b, where p = win probability, b = win/loss ratio, q = 1-p. We use fractional Kelly (0.25×) for conservatism — risking only 25% of the mathematically optimal size. With a 60% win rate and 1.5:1 payoff, full Kelly says risk 20%. Fractional Kelly says 5%. We cap at 2% for additional safety. This means even a string of 10 losses only costs ~18% of portfolio.
What happens at various loss levels
At 7% drawdown: system enters CAUTION mode — continues trading but increases logging. At 10% drawdown: circuit breaker triggers — ALL trading pauses automatically. No manual override needed. The system protects the portfolio even when you're not watching. To resume, you must manually confirm via the admin panel after reviewing what went wrong.