Deterministic Risk Controls: Circuit Breakers and Cooldowns

CoTrading separates two things that many tools blur together: generating trade ideas and enforcing risk limits. Ideas can be probabilistic and creative. Risk enforcement must be deterministic and boring. Here is how the safety layer works.

Determinism, not judgment

Every risk control is a pure function of your settings and your account state. It does not call the LLM. Given the same inputs, it always produces the same decision. That means you can reason about it, test it, and trust it not to "change its mind" under market stress.

The daily-loss circuit breaker

You set a maximum loss for the day. When realized losses reach that threshold, the breaker trips and new risk-increasing orders are blocked for the rest of the session. This caps how bad a single bad day can get — the most common way traders blow up is chasing losses, and the breaker removes that option once you've hit your limit.

Consecutive-loss cooldown

Losing streaks are where discipline erodes fastest. After a configured number of consecutive losses, CoTrading enforces a cooldown: new entries are paused for a set period. It is a built-in "step away from the screen" that fires exactly when your judgment is most likely to be compromised by tilt.

Position caps

Two caps bound your exposure:

• Per-trade cap — no single position can risk more than your configured amount.
• Per-account cap — total open exposure cannot exceed your account-level limit.

Position sizes on every trade plan card are computed to respect these caps, and the caps are re-checked at order time.

Why the caps live outside the AI

If risk logic lived inside the same model that generates trades, a persuasive but wrong rationale could argue its way past your limits. By keeping the controls as local pure functions, the AI can be as creative as it likes on ideas — it still cannot talk the safety layer into letting a trade through. Approval plus deterministic checks is the boundary.

Tuning your limits

Set limits you would be comfortable with on a bad day, then leave them alone. The value of a circuit breaker comes from committing to it in advance — not from renegotiating it mid-drawdown.