Risk Management
Understanding and managing risk is crucial when using automated trading. This guide covers the built-in safeguards, configurable limits, and best practices for responsible auto trading.
Understanding the Risks
Automated trading, while convenient, comes with significant risks that every user should understand before enabling Auto Trader. Being informed helps you make better decisions about your trading settings.
Key Risk Factors
- •Market Volatility — Crypto markets can move rapidly and unpredictably. Even sophisticated analysis cannot predict all outcomes
- •Loss of Capital — Every trade carries the risk of loss. Prediction markets are binary — you either win or lose the position
- •System Limitations — AI analysis is based on historical patterns that may not repeat. Past performance does not indicate future results
- •Technical Issues — Network delays, API issues, or system errors could affect trade execution
- •Consecutive Losses — Even with good analysis, losing streaks can occur. Multiple losses can significantly impact your balance
Built-in Safeguards
Auto Trader includes several built-in protections designed to limit potential losses and maintain responsible trading behavior.
- •Limit Orders Only — All trades use limit orders, never market orders. This prevents unexpected slippage and ensures you know your entry price
- •Automatic Take-Profit — Every position has an automatic take-profit at 99¢, locking in gains when available
- •Trade Size Limits — You set the maximum size per trade, preventing any single trade from being too large
- •Daily Trade Limits — Configure maximum trades per day to prevent overtrading
- •Skip Uncertain Markets — The AI will skip trades when conditions are unclear rather than forcing a position
Configurable Limits
Your Auto Trader settings give you control over risk parameters. Configure these thoughtfully based on your risk tolerance and account size.
Trade Size
Set the dollar amount for each trade. Smaller trade sizes mean less risk per position but also smaller potential gains. Consider your total balance when setting this.
Maximum Trades Per Day
Limit how many trades Auto Trader can place in a 24-hour period. This prevents excessive trading during volatile periods and helps manage overall exposure.
Market Selection
Choose which markets to trade — currently hourly BTC and ETH markets. You can enable or disable specific markets based on your preferences.
Best Practices
Follow these guidelines to use Auto Trader responsibly:
- •Start Small — Begin with minimum trade sizes to observe performance before scaling up
- •Monitor Regularly — Check your Auto Trader dashboard daily to review performance and adjust settings
- •Set Realistic Expectations — Expect both wins and losses. No system wins 100% of the time
- •Don't Chase Losses — Resist the urge to increase trade sizes after losses to "recover" — this often leads to larger losses
- •Maintain Adequate Balance — Keep enough USDC in your account to cover multiple trades plus fees
- •Review Performance Weekly — Assess whether Auto Trader is meeting your expectations and adjust accordingly