Risk Controls
Automated risk management protects vault capital through real-time monitoring and enforcement of drawdown limits.
How Risk Protection Works
Atract protects investor capital by continuously monitoring vault balances and enforcing agreed-upon risk limits.
Protection Features:
Real-time balance monitoring
Automatic enforcement when limits are breached
Continuous peak balance tracking
Daily performance monitoring
Drawdown Limits
Max Drawdown
The maximum percentage loss from peak balance before trading is automatically paused.
Example:
Peak Balance: $100,000
Max Drawdown: 20%
Pause Trigger: $80,000
When vault balance drops to $80,000, trading is paused automatically. You can close existing positions but cannot open new ones.
Recovery: Even if balance improves, vault remains paused until manually unpaused by the trader.
Daily Drawdown
The maximum percentage loss within any 24-hour period.
Example:
Balance at Start of Day: $100,000
Daily Drawdown: 5%
Pause Trigger: $95,000
If balance drops to $95,000 within 24 hours, vault pauses. Limit resets at midnight UTC.
Purpose: Prevents catastrophic single-day losses while allowing longer-term strategies to play out.
What Happens When Paused
Automatically:
Vault status changes to PAUSED
All new trades are blocked
Position increases are prevented
Allowed:
View positions and balance
Close existing positions (reduce-only)
Check vault status and history
Blocked:
Opening new positions
Increasing position sizes
Any action that adds risk
Unpause Process
Manual Unpause: After balance recovers above the limit, trader can request unpause:
Verify balance is above threshold
Request unpause via vault dashboard
Trading resumes after confirmation
Vault Closure: If recovery is unlikely, close vault and trigger settlement:
Close all open positions
Initiate vault closure
Settlement distributes remaining capital according to profit-sharing terms
Balance Requirements
Before every trade, Atract verifies balance data is current:
Fresh: Trade proceeds normally
Warning: Trade allowed with caution
Stale: Trade rejected
Why This Matters: Trading with outdated balance data could violate risk limits without detection.
Deal Deadline
Every vault has a deal deadline based on the agreed duration.
After Deadline:
Vault becomes eligible for closure
No new trades permitted
Parties must settle and close vault
Best Practices for Traders
Stay Within Limits:
Keep a 5-10% buffer below maximum drawdowns
Don't trade right to the edge of limits
Use stop-losses to prevent auto-pause
Monitor Status:
Check vault balance regularly during active trading
Watch daily drawdown progress throughout the day
Plan for Recovery: If paused, evaluate your options:
Close and Accept: Lock in losses, close vault
Wait for Recovery: Keep positions, hope for reversal
Partial Close: Reduce risk while maintaining some exposure
Communicate: Keep investors informed when approaching limits or if paused.
Risk Monitoring Dashboard
Key Metrics Displayed:
Current vault balance (real-time)
Current drawdown from peak (%)
Daily drawdown from day start (%)
Time remaining until deal deadline
Vault pause status
Alert Levels:
Warning: Within 5% of limit
Critical: Within 2% of limit
Paused: Limit breached
Related Topics
Vault Lifecycle - Complete vault journey
Position Management - Managing positions safely
For Traders - Getting started guide
For Investors - Getting started guide
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