Name: RelayDesk
Availability: InStock
Author: RelayDesk

Essential risk controls for automated trading

Never Skip This

Risk management is not optional. Every bot should have multiple layers of protection.

Always Set Risk Limits

Set a maximum dollar amount you're willing to lose per day
Bot auto-pauses when hit
Prevents revenge trading or runaway losses
Recommended: 2-5% of account value per day

Reject trades with bid-ask spreads wider than threshold
Prevents bad fills on illiquid options
Recommended: 0.05-0.10 for stocks, 0.20-0.50 for options
Wider spreads = worse execution prices

Control how many contracts or dollars per trade
Start small - use 1-2% of account per trade
Scale up only after consistent profitability
Never risk more than you can afford to lose

Only trade during specific market hours
Avoid first 15 minutes (9:30-9:45 AM ET) - high volatility
Avoid last 15 minutes (3:45-4:00 PM ET) - market close chaos
Consider avoiding lunch hour (12:00-1:00 PM ET) - low liquidity

Start with Paper Trading

Test your bots with paper trading for at least 1-2 weeks before going live:

Verify webhook format is correct
Confirm bot executes trades as expected
Test exit strategies (OCO levels, trailing stops)
Ensure risk limits trigger properly
Check order types and fills
Monitor for any errors or edge cases

Position Sizing Framework

1% risk per trade
Max 3% of account in open positions
Daily loss limit: 3-5% of account
Stop trading after 2 consecutive losses

2% risk per trade
Max 6% of account in open positions
Daily loss limit: 5-8% of account
Review strategy after 3 consecutive losses

Aggressive Trading Not Recommended

Risking more than 2% per trade or 10% per day significantly increases chance of account ruin. Even professional traders use conservative position sizing.

Trading Calendar Risk Controls

Use Trading Calendar to avoid high-risk periods:

Holiday Weeks - Low liquidity, unpredictable moves
FOMC Days - Federal Reserve meetings cause volatility
Major Economic Events - CPI, NFP, GDP releases
Earnings Season - If trading individual stocks

The 1% Rule

Professional traders follow the 1% rule:

Never risk more than 1% of account on a single trade
With $10,000 account, max risk is $100 per trade
Set stop loss at level that limits loss to 1%
Adjust position size based on stop distance
This allows for 100 consecutive losses before account wipeout (theoretically)

Position Size Calculator

Position Size = (Account Size × Risk %) / Stop Loss Distance. Example: ($10,000 × 1%) / $0.50 = 200 shares

Emergency Controls

Know how to stop everything quickly:

Pause All Bots - Dashboard → Pause All button
Emergency Close - Manually close positions in Alpaca
Disable Webhooks - Delete or pause TradingView alerts
Revoke API Keys - In Alpaca if needed
Contact Support - If you need help

Important Disclaimer

RelayDesk is a tool for executing your strategy. It does not provide trading advice, guarantee profits, or prevent losses. You are responsible for your trading decisions and outcomes. Options trading carries significant risk of loss.