Understanding Risk Levels

A deep dive into how NeoTrading Bot manages risk. Learn about position sizing, leverage, stop-losses, and how each risk profile protects your capital.

Position Sizing

Position sizing determines how much of your capital is used for each individual trade. This is the single most important risk control — it limits your exposure on any single trade.

Risk Level	Max Per Trade	Example ($10,000 account)
Conservative	5% of capital	Max $500 per trade
Moderate	10% of capital	Max $1,000 per trade
Aggressive	20% of capital	Max $2,000 per trade

Professional traders typically risk 1–2% per trade. Even our "Conservative" setting at 5% is relatively generous. The key principle: no single trade should significantly impact your portfolio.

Daily Trade Limits

Trade limits prevent the bot from overtrading — placing too many trades in a short period, which can rack up fees and increase exposure to market noise.

Risk Level	Max Trades/Day	Rationale
Conservative	3 trades	Only high-confidence signals
Moderate	10 trades	Balanced signal filtering
Aggressive	25 trades	Captures more opportunities

Leverage

Leverage allows you to control a larger position with less capital. A 3x leverage means $1,000 controls a $3,000 position. This amplifies both gains and losses.

Risk Level	Max Leverage	Impact
Conservative	1x (no leverage)	You can only lose what you put in
Moderate	Up to 3x	3% price move = 9% P&L
Aggressive	Up to 10x	3% price move = 30% P&L

Leverage is a double-edged sword. With 10x leverage, a 10% adverse move can wipe out your entire position. Only use higher leverage if you fully understand the risks and have experience with leveraged trading.

Leverage only applies to Futures trading. Spot trading is always 1x (no leverage). If you're new to trading, stick with Spot and Conservative risk level.

Maximum Drawdown Protection

Drawdown is the peak-to-trough decline in your portfolio value. NeoTrading Bot automatically pauses trading if your losses exceed the maximum drawdown threshold, protecting you from catastrophic losses.

Risk Level	Max Drawdown	Example ($10,000 account)
Conservative	5%	Pauses at $9,500 (-$500)
Moderate	10%	Pauses at $9,000 (-$1,000)
Aggressive	20%	Pauses at $8,000 (-$2,000)

When the drawdown limit is hit, the bot will:

Stop opening new positions
Close any open positions at market price
Pause the strategy and notify you
Wait for you to review and manually resume

Stop-Loss & Take-Profit

Every trade placed by NeoTrading Bot includes automatic stop-loss and take-profit levels. These are set by each strategy's configuration.

Stop-Loss

Automatically closes a losing trade at a predetermined price to limit losses. Typical range: 3–5% below entry price.

Take-Profit

Automatically closes a winning trade at a target price to lock in gains. Typical range: 6–8% above entry price.

Notice the take-profit is typically 2x the stop-loss. This means even with a 50% win rate, the strategy can be profitable because winners are larger than losers. This is called a favorable risk-reward ratio.

Which Risk Level Should I Choose?

Choose Conservative if:

• You're new to automated trading
• You prefer capital preservation over high returns
• You're testing the platform with real money for the first time
• You want to sleep well at night

Choose Moderate if:

• You have some trading experience
• You're comfortable with moderate volatility
• You want a balance between safety and opportunity
• You've tested with Conservative and want to step up

Choose Aggressive if:

• You're an experienced trader
• You understand and accept the risk of significant drawdowns
• You're using capital you can afford to lose entirely
• You want maximum exposure to market opportunities

You can change your risk level at any time from the Trading page. Changes take effect on the next trade — existing open positions are not affected.