Blog / Trading Strategies
A trading strategy tells you when to enter and exit a single position. The Risk Engine watches the whole account at once — exposure, correlation, and drawdown together — which is a different job that most strategies never do on their own.
Live inputs include total exposure as a percentage of account equity, correlation between currently open positions (so three positions that all move together count as concentrated risk, not three separate diversified bets), current drawdown relative to your historical maximum, and how quickly size or frequency has changed after a recent loss.
None of these are things a single-position strategy is designed to track, which is exactly why they're handled as a separate, always-on layer rather than folded into strategy logic itself.
The Risk Engine isn't meant to override your trading decisions — it's meant to surface the account-level picture your strategy can't see from inside a single trade. When exposure or correlation crosses a threshold you've set, you get a clear signal to act on, rather than discovering the concentration only after it's already cost you.
Risk compounds fastest exactly when discipline is weakest — after a string of losses, when the instinct to 'win it back' is strongest. The Risk Engine is deliberately most active in this exact window, because that's when an account-level check matters more than at any other time.