Risk Level Management

What is the new Risk Level Management functionality?

A new functionality for managing risk in futures trading has been introduced! Please be aware that these alerts are exclusive to the desktop application and are designed solely for notification purposes; they do not automatically liquidate your open trades. If you have multiple positions open simultaneously, the profits and losses of these positions will also factor into the alerts.

The following examples will be centered around trading /ES futures. Key considerations to keep in mind regarding /ES include:

• The point value is 50: This means that if the price of /ES goes from $6,331 to $6,332 it is equivalent to a $50 USD change in profit or loss. In other words, if the price of /ES changes by 1 point, it is equivalent to $50 USD.
• The /ES futures contract ticks at a minimum value of 0.25: This means that the price of /ES will fluctuate in 0.25 increments. There are four of these increments, or "ticks," within a single point
• The tick value is $12.50: This means that if the price of /ES goes from $6,331.25 to $6,331.50 it is equivalent to a $12.50 USD change in profit or loss. Put simply, a movement of 0.25 in /ES represents a $12.50 USD fluctuation.
• The total fees and commission for each contract of /ES is $2.14: This fee is charged on each side of the trade (buy and sell).

What are Daily alerts and how do they work?

Daily alerts are calculated based on the net profit or loss of your open positions from market opening (6 PM EST). The fees and commissions charged upon opening your position will be included in this calculation.

Daily Profit Trigger Example

Let’s say you configure this alert to trigger once your account has a profit of $125. Since /ES has a tick value of $12.50, 10 ticks would be equivalent to $125. The alert will include the cost of fees and commissions, which total $2.14 per side. ES would have to move 11 ticks in your favor to trigger the alert.

If you are long and the price of /ES goes from 6,370 to 6,372.75, the alert will be triggered.

Daily Loss Limit Trigger Example

Let’s say you configure this alert to trigger once your account has a loss of $125. Since /ES has a tick value of $12.50, 10 ticks would be equivalent to $125. Since the alert will include the cost of fees and commissions, which total $2.14 per side, ES would have to move 10 ticks in the opposing direction to trigger the alert.

If you are long and the price of /ES goes from 6,370 to 6,367.50, the alert will be triggered.

What are Weekly alerts and how do they work?

Weekly alerts are calculated based on the net profit or loss of your open positions from market opening (Sunday at 6 PM EST). The fees and commissions charged upon opening your position will be included in this calculation.

Weekly Profit Trigger Example

Let’s say you have only been trading /ES in your account, and the alert is configured at the beginning of the week, while you have no positions open. The weekly profit trigger is set at $750. Throughout the trading week you have had profitable days as well as losing days.

• Monday: You open and close a position of 1 contract and repeat this three times. The total trading loss is $350, and the fees are $12.82 for a total loss of $362.82.
• Tuesday: You open and close a position of 1 contract and repeat this three times. The total trading gains are $775 and the fees are $12.82 for a total gain of $762.18. The alert would not be triggered now since there was a loss on Monday. The net gain for Monday’s and Tuesday’s trading activity is $399.36.
• Wednesday: You open and close a position of 1 contract and repeat this twice. The net gain of this activity is $275, and the total fees are $8.56. The net gain so far today would be 266.44, bringing the weekly total to $665.80. Let’s say you open another position for one contract, including the fee of this open position. The total weekly gain is $663.66. Once your open position moves in your favor by 8 ticks ($100), the alert will be triggered. The weekly gain at this point would be $763.66.

Weekly Loss Limit Trigger Example

Let’s say you have only been trading /ES in your account, and the alert is configured at the beginning of the week, while you have no positions open. The weekly loss trigger is set at $450. Throughout the trading week you have had profitable days as well as losing days.

• Monday: You open and close a position of 1 contract and repeat this three times. The total trading loss is $350, and the fees are $12.82 for a total loss of $362.82.
• Tuesday: You open and close a position of 1 contract and repeat this three times. The total trading gains are $125, and the fees are $12.82 for a total gain of $112.18. The net loss of Monday’s and Tuesday’s trading activity is $250.64.
• Wednesday: You open and close a position of 1 contract and repeat this twice. The net loss of this activity is $175, and the total fees are $8.56. The net loss so far today would be $183.56, bringing the weekly loss total to $434.20.

Let’s say you open another position for one contract, including the fee of this open position. The total weekly loss is $436.34. Once your open position moves in the opposing direction by 2 ticks ($25), the alert will be triggered. The weekly loss at this point would be $461.34.

What is the Real-Time Max Drawdown alert?

The alert will start tallying losses from the moment it is set up, reflecting changes instantly with the market movements of your active trades. When your account hits the preset maximum loss threshold, the alert will be activated. Its functionality mirrors that of the weekly loss limit alert, with the starting point being the moment the alert is configured.

What is the End-of-Day Max Drawdown alert and how does it work?

This alert is dynamic, and the stop loss line will adjust each day based on your end-of-day equity. The stop loss line will adjust upwards as your end-of-day account equity increases. If your closing account equity decreases, the stop loss line will remain the same as the previous day.

Example 1

If the alert is configured when your account equity is $1,500 and the end-of-day max drawdown is set to $500, the alert will activate once your account equity breaches $1,000 (1,500 - 500 = 1,000). If it does not activate within the trading session, and your account balance closes at $2,000 the next day, the threshold will update to $1,500 (2,000 - 500 = 1,500). If during the trading session your account breaches $1,500, the alert will be triggered.

Example 2

If the alert is configured when your account equity is $1,500 and the end-of-day max drawdown is set to $500, the alert will activate once your account equity breaches $1,000 (1,500 - 500 = 1,000). If it does not activate within the trading session, and your account balance closes at $1,300 the next day, the threshold will remain at $1,000. If during the trading session your account breaches $1,000, the alert will be triggered.