# Risk Management

Get risk right first. LuxSignals converts your **account balance**, **risk mode**, and **fees** into a **position size** per trade, and all dashboard money metrics use those exact inputs.

***

### 1) Set your risk inputs (once)

**Where:** `Risk Management`

* **Account Balance** — your trading capital (e.g., `10 000`).
* **Fees %** — your broker/exchange *per-order* fee in percent (e.g., taker `0.10` → enter `0.10`).

  > Fees are included on **entry and exit** (ATR mode) or on **each flip** (Pure mode).

**Mode (pick one):**

1. **Fixed Drawdown**
   * **Fixed Drawdown** (goal) — target max drawdown for the account (e.g., `10 %`).
   * **Max per-trade risk cap** — safety cap per trade (e.g., `5 %`).
   * *Auto-allocates* per-trade risk so the **backtested** max drawdown ≈ your goal, capped by the per-trade limit.
2. **Fixed Percent**
   * **Fixed Risk (%)** — e.g., `1.0–2.0 %` per trade (capped by your per-trade limit).
3. **Fixed Amount**
   * **Fixed Risk (Money)** — e.g., `100` per trade (capped by your per-trade limit).

> **Recommendation:** Start with **Fixed Percent = 1.0–1.5 %**, or use **Fixed Drawdown goal = 10 %** with a per-trade cap around **3–5 %**.

***

### 2) How position size is calculated

LuxSignals computes a **risk money** amount first, then converts it to **units** on each entry.

#### ATR (SL/TP) mode

* **Risk per unit** = `|Entry − Stop|`
* **Position size (units)** = `Risk money / Risk per unit`
* **P/L** displayed = `R-multiple × Risk money − Fees`

#### Pure Signals (Always-in)

* Uses **ATR** as a synthetic risk distance for sizing (no fixed SL).
* **Position size (units)** = `Risk money / ATR`
* Fee applied on each **flip**.

> The trade-size value printed on labels is rounded smartly for readability.

***

### 3) What each risk mode really means

| Mode               | You control                     | The script does                                                                                                    | Best when                                                   |
| ------------------ | ------------------------------- | ------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------- |
| **Fixed Drawdown** | Account-level drawdown goal (%) | Derives per-trade risk from the **backtested** max DD of the chosen settings, then caps it by your per-trade limit | You want smoother equity and comparable risk across markets |
| **Fixed Percent**  | Risk % per trade                | Keeps it constant (capped)                                                                                         | You prefer a consistent “1–2% per trade” style              |
| **Fixed Amount**   | Risk money per trade            | Keeps it constant (capped)                                                                                         | You trade one market with stable volatility                 |

> In **Fixed Drawdown**, if the tested combo shows larger historical drawdowns, the per-trade risk **shrinks** to respect your goal.

***

### 4) Fees: how to set them

* Enter your **total per-order fee** in **percent** (e.g., taker 0.10 % → `0.10`).
* The script deducts:
  * **Entry + Exit** for ATR (SL/TP) trades
  * **One fill per flip** for Pure Signals
* Dashboard metrics (Profit %, Profit in currency, Profit Factor) are **fee-aware**.

***

### 5) Quick checks on the Dashboard

* **Risk in Percent** (shown when relevant): the *actual* per-trade risk used.
* **Profit in Percent / currency**: already accounts for your risk and fees.
* **Max Drawdown**: in % of your balance, derived from your risk mode.

***

### 6) Safe starting points

* **Small account / learning:**
  * Fixed Percent = **1.0 %**, Fees = your broker’s taker %, ATR SL around **1.5–2.0 × ATR**, RR **1.5–2.5**.
* **Intermediate:**
  * Fixed Drawdown **10 %**, per-trade cap **3 %**. Let **Automatic** pick settings; re-run after regime shifts.

***

### 7) Common pitfalls (and fixes)

* **Equity swings feel too large** → lower **Fixed Percent**, or raise **Drawdown goal strictness** (smaller goal %) and/or lower the per-trade cap.
* **Too small position sizes** → your **fees %** might be high or your SL distance is wide; consider reducing SL×ATR or using fewer TPs.
* **Backtest looks great, live feels off** → re-optimize after market regime changes; prefer **Profit Factor / Min Drawdown** over raw profit.

***

### 8) The math at a glance


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