Running a single trading bot is manageable. Running five simultaneously without a risk framework is how accounts blow up in a weekend. Portfolio-level risk management is not optional.
**Position-Level Risk** — each individual trade should risk no more than 1-2% of total capital.
**Strategy-Level Risk** — each running strategy gets a maximum drawdown budget. When a strategy hits its limit, it pauses automatically.
**Portfolio-Level Risk** — the total open exposure across all strategies should never exceed your maximum tolerable drawdown.
Two strategies can both look profitable in isolation but be perfectly correlated. This doubles your drawdown without doubling your edge.
Use a tiered drawdown system: Yellow at 5% reduces position sizes by 50%, Orange at 10% pauses new entries, Red at 15% halts all bots for manual review.
class PortfolioRiskManager:
def __init__(self, capital, max_drawdown=0.15):
self.capital = capital
self.max_drawdown = max_drawdown
self.peak_equity = capital
def update_equity(self, current_equity):
self.peak_equity = max(self.peak_equity, current_equity)
drawdown = (self.peak_equity - current_equity) / self.peak_equity
if drawdown >= self.max_drawdown:
print("[RISK] Drawdown limit hit — halting strategies")
return drawdown
Q: What is the maximum drawdown limit I should set for my LMEX trading bots?
A conservative approach is a 10-15% portfolio drawdown limit with a tiered system: reduce position sizes at 5%, pause new entries at 10%, and halt all bots at 15% for manual review.
Q: How do I manage multiple trading strategies running simultaneously on LMEX?
Assign each strategy a capital allocation and individual drawdown budget. Monitor correlation between strategies — two strategies that move together in the same direction effectively double your risk without doubling your edge.
Q: Should I use the same position sizing for all my LMEX bots?
No. Use Kelly Criterion or fixed fractional sizing calibrated per strategy based on its historical win rate and risk-reward ratio. A strategy with a 60% win rate and 1:1 RR warrants different sizing than one with 45% win rate and 2:1 RR.
Q: How often should I review my algo portfolio risk metrics?
Check daily at minimum. Automated alerts via Telegram or email when any strategy hits 50% of its drawdown budget give you time to intervene before hitting the hard limit.