Risk · boundaries
Risk management is the boundary around every decision—not a stop-loss button.
Product mechanics, position concentration, liquidity, gaps, operational risk, and the ability to stop all matter before a trade is evaluated.
Define invalidation and affordability separately
The price that disproves a thesis is not automatically an affordable loss. First identify invalidation, then decide whether the required distance fits your independent risk policy. If not, skip the trade rather than move the thesis.
Count correlated exposure
Different tickers can express the same risk. Technology stocks, semiconductor ETFs, index calls, and crypto beta may all depend on one liquidity narrative. Review the portfolio by drivers, not names.
Plan for gaps and missing liquidity
Stops do not guarantee an exit price. Earnings, macro releases, overnight sessions, venue outages, and fast markets can produce fills far from the plan. A product that can gap beyond the affordable boundary is not controlled by the stop alone.
Include operational failure
Wrong order type, duplicated orders, compromised credentials, custody loss, frozen withdrawals, and connectivity failure are trading risks. Write a stop-work procedure and verified support path before they happen.
Set a portfolio and session stop
Single-trade controls do not prevent a day of repeated attempts or several positions moving together. Define when no new risk may be added and when the entire process pauses for review.
Start with personality. Finish with a process you can actually test.
Time and experience get the final say. If a method needs attention you cannot reliably give it, the method moves down the list.