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How to configure Grit Markets risk controls

Grit Markets automates a Martingale-based strategy, which means its risk controls are not optional extras; they are the difference between a bounded worst case and an unbounded one. This guide walks through each control in the order you should set them, before the EA places its first live trade. The guiding principle throughout is honest: tighter caps reduce the size of drawdowns and increase how often small losses are realised, looser caps do the reverse, and no combination of settings removes the risk of losing the account balance. Decide your worst case first, then set the controls to enforce it.

  1. Decide your maximum acceptable loss before touching any setting

    Write down, as an amount of money, the most you are prepared to lose on the account running Grit Markets. Not per trade and not per month: in total, in the worst case. Every subsequent setting exists to enforce this number, and if you skip this step the settings have nothing to enforce. If the honest answer is that you cannot afford to lose the balance on this account, fund a smaller account before proceeding.

  2. Set the equity stop

    The equity stop closes every open position and halts trading when floating losses reach a percentage of account equity that you define. It is the account's final safety net, so set it first and never disable it. Choose the percentage from the maximum loss you wrote down in the previous step. Be aware of its limits: in a fast or gapping market the actual closing prices can be worse than the trigger level, so the realised loss can exceed the configured one.

  3. Cap the maximum recovery levels

    The level cap limits how many times the EA may add to a losing basket. Because position size grows geometrically with each level, this single input largely determines the size of the worst-case basket. Fewer levels mean smaller and more frequent realised losses; more levels mean smoother periods punctuated by deeper drawdowns. Start at the conservative end of the documented range and resist raising it after a losing basket, which is precisely when raising it is most tempting and most dangerous.

  4. Size the base lot from the worst case backwards

    The base lot is the volume of the first trade in each cycle, and everything in the worst-case basket scales linearly with it. Do not choose it by what looks profitable; derive it by working backwards from your equity stop, multiplier and level cap so that a fully extended basket at maximum drawdown stays inside the loss you decided in step one. The simulator on gritmarkets.com does this arithmetic for you: enter your account size, multiplier and level cap, and adjust the base lot until the worst-case figure is one you have already accepted.

  5. Configure the news and session filters

    The news filter keeps the EA from opening new cycles around high-impact scheduled releases such as central bank decisions and major economic data, and the session filter restricts trading to the hours you specify. Both reduce the chance of a basket being opened directly into a violent move. Enable the news filter with a sensible buffer either side of events, and consider excluding illiquid periods such as the daily rollover. Remember their limit: filters cover scheduled events, and the most damaging moves are often unscheduled.

  6. Verify the configuration on a demo account

    Attach the EA with your chosen settings to a demo account of the same size and broker conditions as your intended live account, and let it run until you have watched at least one full recovery basket form and resolve. Confirm the equity stop triggers where you expect by checking the log, and confirm the level cap holds. A configuration you have watched fail safely on demo is worth more than any backtest.

  7. Go live, then review on a schedule and never mid-basket

    Once live, review your settings on a fixed schedule, monthly is reasonable, and after any market event that changes your view of risk. Make changes only when the EA is flat. Loosening caps while a losing basket is open converts a controlled strategy into an uncontrolled one in a single click, and it is the most common way disciplined subscribers become undisciplined ones. If you find yourself wanting to intervene mid-drawdown, the setting to change afterwards is usually the base lot, downwards.

Notes

  • [OWNER INPUT: confirm final EA feature list. The controls described here, equity stop, maximum recovery levels, base lot sizing, multiplier, news filter and session filter, must match the shipped input parameters exactly, including their input names.]
  • Tighter settings reduce the size of individual drawdowns but tend to realise small losses more often; looser settings smooth the equity curve while deepening the eventual drawdowns. There is no configuration of Grit Markets that removes the risk of losing the balance on the account it trades.
  • Where you use backtests to compare configurations, remember they are simulated results. Backtests do not predict live performance.
  • Nothing in this guide is investment advice. It describes how the software's controls operate so you can make your own decisions.