Risk Management

How NeuroTrade’s 7-layer risk engine protects your capital on every single trade.

Every trade passes through 7 independent risk checks before execution — no matter which tier, which Brainiac personality, or which strategy generated the signal. If any layer rejects the trade, it does not execute. Brainiac cannot override the risk engine. Even high-conviction predictive signals from OmniSense™ on the Genesis tier are subject to the same 7-layer gate.

The 7-Layer Risk Engine

Position Sizing

Automatically sizes each position based on your account balance, current exposure, and the asset's volatility. Prevents any single trade from risking too much of your capital. Uses Kelly Criterion with a fractional multiplier for conservative sizing.

Drawdown Limits

Monitors your portfolio's drawdown in real-time. If the portfolio drops below your maximum drawdown threshold (configurable per risk profile), all new trades are paused until the portfolio recovers above the recovery threshold. Prevents compounding losses.

Correlation Checks

Analyzes the correlation between your open positions. Prevents concentrating risk in highly correlated assets (e.g., holding long positions in 5 altcoins that all move together). Enforces diversification across correlation clusters.

Volatility Guards

Monitors real-time volatility using proprietary multi-factor analysis. During extreme volatility spikes, reduces position sizes or pauses new entries. Protects against flash crashes and liquidation cascades.

Exposure Caps

Enforces maximum total exposure as a percentage of your account balance. Even if 10 strategies signal entry simultaneously, total deployed capital never exceeds your exposure cap. Default is 60% for Conservative, 80% for Balanced, 95% for Aggressive.

Time-Based Limits

Limits the number of trades per time period (hour, day) and enforces minimum time between entries on the same asset. Prevents overtrading during choppy conditions and reduces commission costs.

Emergency Kill Switch

The final safety layer. Closes all open positions and cancels all pending orders instantly with one click. Also triggers automatically if the portfolio hits the catastrophic loss threshold (configurable, default -15% daily).

Risk Profiles

Choose a risk profile that matches your comfort level. You can change your profile at any time from Settings → Risk.

We recommend starting with the Conservative profile. You can always increase risk later once you understand how the system behaves with real capital.

Emergency Kill Switch

🚨 Emergency Kill Switch

Instantly closes ALL open positions and cancels ALL pending orders across all exchanges and all strategies.

Available in your dashboard header. Also triggers automatically at your daily loss limit.

The kill switch performs the following actions in sequence:

Cancels all pending/open orders on all connected exchanges
Closes all open positions with market orders
Pauses all active strategies
Sends an immediate notification (email + Telegram if configured)
Logs the event with full audit details

The kill switch uses market orders, which may experience slippage during volatile conditions. The actual close price may differ from the displayed price at the time of activation.

Understanding the Audit Trail

Every Brainiac decision and every resulting trade is logged with a full audit trail. Navigate to the AI Insights page to see the decision layer, and Trade History to see the execution layer. Each decision includes:

Signal source: Which strategy gated the opportunity and which Brainiac personality produced the decision
Conviction score: 5-factor weighted score (0.0-1.0) with the component weights and the per-factor values
Thesis summary: One-sentence explanation of the setup
Full reasoning: 2-4 sentences with specific price levels, indicator values, regime classification, and cross-asset context
Invalidation condition: The specific price action or event that would prove the thesis wrong
Risk flags: Named factors that could invalidate the trade (e.g. wick_rejection_at_resistance_possible, 4h_rsi_overbought)
Risk-engine verdict: Status of all 7 risk layers (pass/fail) with reason for any rejection
Position size calculation: How the size was determined, including tier-based scaling
Entry/exit reasoning: Why the trade was entered and, on close, why it was closed
PnL breakdown: Gross profit, fees, slippage, net result

This transparency is the core differentiator versus black-box rule-based bots. You always know exactly what Brainiac did, why it did it, which risk layer caught any rejection, and what would have made it change its mind. Holds are logged too — when Brainiac refuses a marginal setup, you see exactly which factor was missing.

From Cortex tier and above, you can also replay any Brainiac personality against historical candles to see how it would have behaved on past weeks (“what would Scalper have done on BTC last Tuesday?”). This is the Brainiac-driven backtest feature, and every historical decision comes with the same full reasoning as live decisions.