Risk controls you can see
SmartSwing treats risk management as the most critical component of the system — more important than signal generation, AI intelligence, or user experience. The platform operates under one principle: protecting capital is the primary objective.
Layered safety architecture
Nine independent layers of protection, each addressing a specific category of risk.
Position-Level Stop Losses
Every position has a hard stop-loss at 3-4% below entry price. Once a position gains 1.5-2%, a trailing stop activates to protect profits. No single trade can cause outsized damage.
Daily Loss Circuit Breaker
If the portfolio drops 3% in a single day, all trading halts for the remainder of that session. This prevents cascading losses during market dislocations.
Drawdown Halt
All trading pauses when the portfolio drawdown from its peak reaches 8%. The trust ladder automatically reverts to a safer stage. This preserves principal above all else.
Cash Reserve
A 30% minimum cash buffer is maintained at all times, with a maximum of 7 simultaneous positions. This ensures flexibility for new opportunities and limits concentration risk.
Settled Cash Enforcement
Trades execute only against T+1 settled funds. This prevents good-faith violations that could result in account restrictions from the brokerage.
Correlation Screening
New positions are rejected if they are more than 0.7 correlated with existing holdings. This prevents portfolio concentration risk during market stress.
AI Fail-Safe
If the AI validation service is unavailable, live trading pauses automatically. Simulation continues so performance tracking is uninterrupted, but no real capital is at risk during the outage.
Emergency Pause
A one-tap button on the dashboard halts all trading immediately. No waiting period, no confirmation dialogs. Restores your sense of control at any moment.
Spread Cost Model
The system estimates the real friction of fractional market orders. If estimated trading costs for a stock exceed viability thresholds, the signal is rejected before execution.
At a glance
| Safety Layer | Threshold | Action |
|---|---|---|
| Position stop-loss | 3-4% below entry | Close position |
| Daily circuit breaker | 3% daily loss | Halt all trading for the day |
| Drawdown halt | 8% from peak | Pause trading, revert trust tier |
| Cash reserve | 30% minimum | Reject new positions |
| Correlation limit | >0.7 correlation | Reject correlated position |
| AI fail-safe | AI unavailable | Pause live trading |
What SmartSwing does not protect against
No system can eliminate all investment risk. SmartSwing is transparent about the limits of its protections.
- Market-wide crashes or severe corrections affecting all equities
- Black swan events with unprecedented market impact
- Regulatory changes that affect trading or account access
- Prolonged bear markets that erode capital within stop-loss parameters
- Brokerage outages that prevent trade execution
- Tax liabilities from realized gains
- Opportunity cost of capital held in cash reserves
Capital protection comes first
See the risk engine at work. Start with paper trading and zero real risk.
Investing involves risk. SmartSwing does not guarantee returns.