Risk tools
Good trading is mostly about keeping losses small
Winning every trade is not a realistic goal and not a useful one. A losing trade that stays small costs very little. The tools on this page exist to make that the normal outcome rather than something you have to remember under pressure.
Stop-loss and take-profit on every position
Daily loss limits that pause trading automatically
A one-click kill switch
Negative balance protection through the licensed broker
Why it matters
Why this matters more than picking trades
ASIC research has consistently found that most retail clients trading contracts for difference lose money. When ASIC introduced stronger retail protections including leverage caps and negative balance protection, aggregate retail losses fell sharply - which is a useful demonstration that position and risk controls move outcomes more than trade selection does.
That is the reasoning behind putting these controls in the account from the start rather than offering them as an advanced setting. The people who need a stop-loss most are the ones least likely to go looking for it.
Tools
The toolkit
| Tool | What it does | Why it helps |
|---|---|---|
| Stop-loss | Closes a position at a chosen level if price moves against it | Caps what a single losing trade can cost |
| Take-profit | Closes a position when a target is reached | Takes the decision out of the moment when a gain is largest |
| Trailing stop | Moves the stop-loss up as price moves favourably | Lets a winning position continue while protecting the gain |
| Risk per trade | Limits how much of the balance one position can risk | Stops a single trade from damaging the account |
| Daily loss limit | Pauses trading once losses reach a set figure | Stops a bad day becoming a bad month |
| Maximum open positions | Caps how many trades run at once | Prevents accidental overexposure to one move |
| Leverage control | Allows trading below the regulatory maximum | Reduces the size of every swing, in both directions |
| News filter | Avoids opening positions immediately before major announcements | Reduces exposure to spikes and widening spreads |
| Kill switch | Stops all automated trading in one click | Guarantees a way to stop, whatever else is happening |
Sizing
How position sizing works
Position sizing means deciding how large a trade should be based on how much you are prepared to lose on it, rather than on how confident you feel. The common guideline is to risk no more than one per cent of the balance on a single position.
| Example | Value |
|---|---|
| Account balance | AUD 1,000 |
| Risk per trade, at 1 per cent | AUD 10 |
| Distance from entry to stop-loss | 2 per cent |
| Position size that produces that risk | AUD 500 |
The platform does this arithmetic from your settings, so the position size follows from where the stop-loss sits rather than being chosen separately. That is the point of setting the stop-loss first.
Ratio
Risk and reward, and why the ratio matters
Every position has a planned risk, measured to the stop-loss, and a planned reward, measured to the target. At a ratio of one to two, the target is twice the distance of the stop, so a single winning trade covers two losing ones before costs.
This is why a strategy can be viable without being right most of the time, and equally why a high win rate on its own tells you nothing. A strategy that wins nine times out of ten while risking ten to make one will still lose money over time.
Starting points
Three starting points
If you are unsure where to begin, these are reasonable starting configurations rather than recommendations. Adjust them with your account manager once you know how the account behaves.
| Setting | Conservative | Balanced | Active |
|---|---|---|---|
| Risk per trade | 0.5 per cent | 1 per cent | 2 per cent |
| Daily loss limit | 2 per cent of the balance | 3 per cent of the balance | 5 per cent of the balance |
| Maximum open positions | 2 | 4 | 6 |
| Leverage | Lowest available | Moderate | Higher, within regulatory limits |
| Mode | Signal mode | Signal or Automated | Automated |
Protections
Protections that come with the account
Leverage limits set by ASIC
From 30:1 on major currency pairs down to 2:1 on crypto for retail clients.
Negative balance protection
A loss cannot exceed the funds in your account. You cannot end up owing money on a losing trade.
A licensed broker
Orders are executed and client funds are held by the partner broker, which holds an Australian Financial Services Licence issued by ASIC.
A complete trade log
Every position records why it was opened and how it was managed, so the reasoning is reviewable afterwards.
Diversification
Spreading risk across markets
Crypto, forex, gold and shares respond differently to the same news, which is what makes holding several worthwhile. A stronger dollar pressures gold and supports the currency it is measured against, and both can rise while an equity index falls. Trading a mix of small positions produces a smoother result than one large position in whichever market is currently the most exciting.
Checklist
Before switching on automation
- A stop-loss is set on every position
- Risk per trade is one to two per cent or less
- A daily loss limit is in place
- Leverage is set at a level you understand
- You know where the kill switch is without looking for it
- You will review the results at least once a week
Questions
Frequently asked questions
What are the most important risk tools?
Can I lose more than I deposit?
Does a stop-loss always close at my exact price?
Can I change my risk settings later?
What is the one per cent rule?
Get started
Set your limits and start
Register free
The form takes about two minutes and costs nothing.
Fund your account
Deposit from AU$250 in Australian dollars.
Set your limits
Set your risk limits with your account manager before the first trade.