Rule 1: The 1% Rule
Never risk more than 1% of your total capital on a single trade. With 10,000 in virtual capital, that means: maximum loss per trade = 100. It sounds small, but after 100 trades with a 60% win rate and 1:2 risk-reward ratio, you'll be well in profit.
Rule 2: Limit Maximum Open Positions
If you're running 5 bots simultaneously and each has 5 open positions, you're exposed across 25 positions. In a flash crash, you lose on all fronts at once. Limit the total number of open positions — as a rule of thumb: never have more than 10% of your capital in the market at the same time.
Rule 3: Watch for Correlation
BTC drops — and ETH, SOL, BNB drop with it. If all your bots are running on crypto pairs, you're not truly diversified. Real diversification means: different markets (crypto + forex), different strategies (trend + mean reversion), different timeframes.
Rule 4: Set a Drawdown Limit
Define a maximum drawdown per bot and overall. Example: if a bot loses 15% from its peak, it gets automatically paused. This protects against the worst-case scenario.
Rule 5: Review Regularly
Automated doesn't mean forgotten. Check your bots weekly: does the performance match the backtest? Has the market phase changed? Do parameters need adjusting?
BotTrade.app Risk Features
Every bot has configurable stop-loss, take-profit, and position sizing parameters. The reporting dashboard shows drawdown and risk metrics in real time.
Learn risk management in practice — without real risk.