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Add Risk Management to Trading Strategies

What this Workflow Does

The Add Risk Management workflow helps you extend an existing trading strategy with explicit risk and safety controls.

It is designed to add:

  • Position sizing rules
  • Maximum risk per trade
  • Exposure and position limits
  • Trade frequency or cooldown limits
  • Safety stops and guard conditions

This workflow focuses on protecting capital and controlling behaviour, not improving strategy performance.

When to Use This Workflow

Use this workflow when:

  • You already have a working trading strategy
  • Entries and exits are clearly defined
  • You want consistent, rule based risk control
  • You need safety limits before live or extended testing

Do not use this workflow to design the trading logic itself.
Build or fix the strategy first, then add risk management.

What You Should Prepare

Before starting, make sure you can describe:

  1. How risk should be measured
    (fixed size, percentage, balance based, etc.)

  2. Maximum acceptable loss per trade or session

  3. Any limits you want to enforce:

  4. Maximum open positions
  5. Maximum daily loss

  6. Cooldown between trades

  7. Whether risk rules should block entries or close positions

Risk rules should be simple and explicit.

How to Interact with CodePilot

Describe risk rules in clear, testable terms.

Good examples:

  • “Risk 1% of account balance per trade.”
  • “Limit to one open position at a time.”
  • “Stop trading after two losing trades.”
  • “Block new trades after daily loss is reached.”

Avoid vague requests such as: - “Add smart risk management.” - “Make it safe.” - “Use professional risk rules.”

Ambiguous risk rules lead to incorrect behaviour.

How CodePilot Adds Risk Management

CodePilot will:

  • Insert risk checks at the correct execution points
  • Keep risk logic separate from entry logic
  • Add configurable parameters where appropriate
  • Preserve existing strategy behaviour
  • Return a complete, compile-ready file

Risk rules are applied incrementally and transparently.

Common Mistakes to Avoid

  • Adding risk rules before the strategy works
  • Mixing risk logic into indicator calculations
  • Adding too many rules at once
  • Not testing boundary conditions

Always test risk rules in isolation.

After adding risk management:

  • Test with small sizes or simulation
  • Confirm limits trigger correctly
  • Review logs or outputs carefully

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