Blog / Performance Analytics
Your risk score is not a grade on your trading — it's an early-warning gauge that reacts faster than your equity curve does, built from the same signals that eventually show up in P&L, just before they show up.
The risk score blends several live inputs: current exposure relative to account equity, correlation between simultaneously open positions, distance between current drawdown and your historical maximum, and how far current position sizing has drifted from your typical baseline.
Because these inputs update as you trade rather than at the end of the day, the score can shift within a single session — which is intentional. Risk is a live condition, not a monthly summary.
Two accounts can show the exact same balance and have very different risk scores, because one is concentrated in three correlated positions at high leverage while the other is spread across uncorrelated instruments at conservative size. The balance doesn't show that difference. The risk score does.
This is the entire point of building it as a separate signal from P&L: by the time a concentration problem shows up in your account balance, it's often too late to do anything gentle about it.
Treat a rising risk score the same way you'd treat a smoke detector — not as a verdict, but as a prompt to check what changed. Did you add a correlated position? Increase size after a loss? Hold a trade longer than planned? The score itself won't tell you the story, but it reliably tells you when to go look for one.