Fixed Percentage Risk Model

Entry Logic

• Not applicable. This is a risk management model.

Exit Logic

• Not applicable. This is a risk management model.

Stop Loss Structure

• Not applicable. This is a risk management model.

Risk Management Framework

• Risk per trade: 1% of total account equity.
• Maximum daily loss limit: 3% of starting daily equity.
• Maximum weekly loss limit: 6% of starting weekly equity.
• Maximum drawdown allowed: 20% from peak equity.
• Risk-reward ratio requirement: Minimum 1.5R on all trades.

Position Sizing Model

• Sizing approach: Size = (Account Equity * Risk Percentage) / (Entry Price - Stop Price).
• Volatility adjustment: None. Risk is a fixed percentage of equity.
• Conviction sizing: A+ setups risk 1%, A setups risk 0.75%, B setups risk 0.5%.
• Scaling in/out: Not applicable.*

Trade Filtering

• Not applicable. This is a risk management model.

Context Framework

• Not applicable. This is a risk management model.

Trade Management Rules

• Not applicable. This is a risk management model.

Time Rules

• Not applicable. This is a risk management model.

Setup Classification

• Not applicable. This is a risk management model.

Market Selection Criteria

• Instrument requirements: Highly liquid instruments to minimize slippage.
• Volume requirements: Minimum 1 million shares traded daily.
• Volatility requirements: None.

Statistical Edge Metrics

• Not applicable. This is a risk management model.

Failure Conditions

• Strategy fails during black swan events or significant gap downs.
• Avoid applying to illiquid instruments with high slippage.

Psychological Rules

• Adhere strictly to the calculated position size.
• Do not override the model based on emotion.

Advanced Components

• Not applicable. This is a risk management model.

Location

• Strongest in a diversified portfolio of liquid assets.
• Weakest in a concentrated portfolio of illiquid assets.