Risk Management

#Overview

Risk management is built into every layer of Stratium's copy trading engine. Before any trade executes in your wallet, multiple checks ensure the trade fits within your risk parameters.

#Scaling Factors

The scaling factor is the primary risk control. It determines what fraction of the target wallet's trade is replicated in your wallet.

#How Scaling Works

If a target wallet buys 10 SOL worth of a token and your scaling factor is 0.05x:

• You buy: 10 SOL × 0.05 = 0.5 SOL worth of that token

Lower scaling factors mean smaller position sizes relative to the target, reducing both potential gains and losses proportionally.

#Per-Target Scaling

Each target wallet assignment has its own scaling factor. This means you might have:

• Conservative strategy target: 0.05x (smaller positions)
• Aggressive strategy target: 0.02x (even smaller positions due to higher risk)

This granular control ensures your risk is managed per strategy, not just globally.

#Position Caps

Position caps prevent any single trade from using too much of your balance.

#Percentage Cap

No single trade can exceed a set percentage of your total portfolio value. Default: 25%.

Example: If your wallet has 10 SOL, no single trade will exceed 2.5 SOL, regardless of the scaling factor calculation.

#Trade Size Multiple Cap

An additional safety net that limits the maximum trade size to a multiple of the intended scaled amount. This catches edge cases where a target wallet makes an unusually large trade.

#Minimum SOL Reserve

Stratium always keeps a minimum amount of SOL in your wallet to ensure:

• Transaction fees can always be paid (~0.000005 SOL per transaction)
• Future trades can still execute
• Withdrawal gas is available when you want to withdraw

Default minimum reserve: 0.01 SOL

If a trade would bring your SOL balance below this reserve, the trade is skipped or the trade size is reduced to maintain the reserve.

#Slippage Protection

When executing swaps through Jupiter, Stratium sets a maximum slippage tolerance:

• Default slippage: 1-3% depending on token liquidity
• If the actual price moves more than the tolerance during execution, the transaction is rejected
• This prevents large losses from price manipulation or illiquid markets

#Duplicate Trade Prevention

The copy trading engine tracks recent trades to prevent duplicates:

• If the same target wallet trades the same token multiple times in quick succession, only the first trade is copied
• This prevents "double-spending" during network congestion or message queue retries

#Balance Checks

Before every trade, the engine verifies:

1. Sufficient SOL balance for the trade amount plus fees
2. No existing large position in the same token (prevents overconcentration)
3. Reserve maintained after the trade completes

If any check fails, the trade is skipped and logged (not silently dropped).

#Configuring Your Risk Settings

In the Telegram bot, tap Settings to adjust:

• Scaling factor — Increase or decrease your per-trade size
• Notifications — Get alerted for every trade, or only summaries
• Trading status — Pause and resume trading at any time

#Risk Management Summary

Protection	What It Does	Default
Scaling Factor	Scales trade size relative to target	Per-target
Percentage Cap	Max % of portfolio per trade	25%
SOL Reserve	Minimum SOL kept in wallet	0.01 SOL
Slippage Protection	Max price deviation allowed	1-3%
Duplicate Prevention	Blocks repeated identical trades	Always on
Balance Check	Verifies funds before execution	Always on

#Learn More

• Trading Strategies — How strategies differ in risk profile
• Security — How your funds are protected
• How Stratium Works — The full execution pipeline
• Risk Management for Memecoin Trading — Complete guide to position sizing, stop-losses, and capital allocation for meme coin trading
• Meme Coin Trading Strategies — Strategies used by profitable traders