Risk Management

TL;DR: Stratium applies six risk controls before every trade: a scaling factor (controls what fraction of target trades you copy), a 25% portfolio cap per trade, a minimum 0.01 SOL reserve, 1–3% slippage protection, duplicate trade prevention, and pre-trade balance verification. These run in sequence — any single failure skips the trade and logs the reason.

#How does Stratium manage trading risk?

Risk management is built into every layer of Stratium's copy trading engine. Before any trade executes in your wallet, six sequential checks verify the trade fits within your risk parameters. No single check failing causes a silent error — skipped trades are always logged with the specific reason.

The six controls, in the order they run:

1. Scaling factor calculation
2. Portfolio percentage cap
3. Minimum SOL reserve check
4. Slippage tolerance enforcement
5. Duplicate trade detection
6. Final balance verification

#What is a scaling factor and how does it limit my exposure?

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 0.05×:

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

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

#Per-target scaling

Each target wallet assignment has its own independent scaling factor. A single user might have:

• Conservative strategy target: 0.05× (smaller positions, lower-risk wallets)
• Aggressive strategy target: 0.02× (even smaller positions, higher-risk wallets)

This granular control ensures your risk exposure is calibrated per strategy, not applied as a blunt global setting.

#How do position caps prevent overexposure?

Position caps prevent any single trade from consuming too much of your portfolio — even when the scaling factor calculation would produce a large trade.

#Percentage cap (default: 25%)

No single trade can exceed 25% of your total portfolio value.

Example: Portfolio has 10 SOL. The scaling factor calculation produces a 3 SOL trade. The 25% cap limits it to 2.5 SOL. The smaller of the two values always applies.

#Trade size multiple cap

An additional safety net 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 that would otherwise produce an outsized position in your wallet.

#Why does Stratium keep a minimum SOL reserve?

Stratium always maintains a minimum amount of SOL in your wallet to ensure ongoing functionality:

• Transaction fees — Every Solana transaction requires a small fee (~0.000005 SOL, or less than $0.001 at current prices)
• Future trades — Having zero SOL prevents any future copy trades from executing
• Withdrawal gas — You need SOL to sign and submit the withdrawal transaction itself

Default minimum reserve: 0.01 SOL

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

#How does slippage protection work?

When executing swaps through Jupiter's DEX aggregator, Stratium sets a maximum slippage tolerance per trade:

• Default slippage: 1–3% depending on token liquidity (tighter for liquid tokens, wider for low-liquidity tokens)
• Protection logic: If the actual price moves more than the tolerance between the quote and the on-chain execution, the transaction is rejected before any funds move
• Purpose: Prevents large losses from price manipulation, MEV sandwich attacks, or illiquid market conditions

Jupiter's routing engine also finds the optimal multi-hop path to minimize price impact across the 20+ DEXes it aggregates, reducing the effective slippage on most trades.

#How does Stratium prevent duplicate trades?

The copy trading engine tracks recent trades to prevent double-execution:

• A 7-day Redis key is written for every successfully copied target transaction signature
• If the same target wallet transaction appears again (from a retry, network duplication, or message queue re-delivery), the dedup key is detected and the copy is skipped
• This prevents double-buying during network congestion or service restarts

The dedup window is 7 days — long enough to cover any realistic retry scenario while not consuming indefinite memory.

#What balance checks run before every trade?

Before every trade, the engine runs three final checks in sequence:

1. Sufficient SOL balance — User must have enough SOL for the trade amount plus the estimated transaction fee
2. Position concentration check — Does the user already hold a large position in this token? Prevents overconcentration in a single asset.
3. Reserve maintained — Will the user retain at least 0.01 SOL after this trade completes?

If any check fails, the trade is logged as skipped with the specific reason — never silently dropped.

#How does trade size percentage control position sizing?

The trade size percentage is a user-configurable setting that provides a second, portfolio-relative limit on position sizing. It works independently from scaling factors.

#How it works

The trade size percentage caps each trade at a percentage of your available balance:

• Default: 1.0% of portfolio per trade
• Range: 0.1% to 10.0%
• Example: 10 SOL portfolio + 2% trade size = max 0.2 SOL per trade

#Scaling factor vs trade size — which applies?

Both controls apply simultaneously; the smaller value wins:

Control	What It Does	Set By
Scaling Factor	Scales relative to target wallet's trade size	Stratium (per target wallet)
Trade Size %	Caps your trade as % of your portfolio	You (global setting)

Full example:

• Target wallet trades 10 SOL
• Your scaling factor: 0.1× → scaled amount = 1 SOL
• Your portfolio: 5 SOL, trade size: 2% → cap = 0.1 SOL
• Actual trade: 0.1 SOL (the smaller of 1 SOL and 0.1 SOL)

#Recommended settings by experience level

Setting	Trade Size %	Best For
Conservative	0.5–1%	Beginners; minimal risk; slower growth
Moderate	1–2%	Most users; balanced risk/reward
Aggressive	3–5%	Experienced traders with higher risk tolerance
Maximum	5–10%	Only for high-conviction, high-risk strategies

#How do I configure my risk settings?

Via Telegram bot: Tap Settings → Trading Preferences to adjust:

• Trade Size % — Set 0.1–10%; choose from presets (0.5%, 1%, 2%, 5%) or enter a custom value
• Pause/Resume Trading — Stop all copy trading activity at any time without withdrawing

Via web dashboard: Go to Settings → Trading to use a slider with live preview of the impact at different portfolio sizes.

#What risk controls does Stratium apply by default?

Protection	What It Does	Default
Scaling Factor	Scales trade size relative to target	Per-target (set by Stratium)
Portfolio 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% (liquidity-adjusted)
Duplicate Prevention	Blocks repeated identical trades	Always on (7-day window)
Balance Check	Verifies SOL + position + reserve	Always on
Trade Size %	User-controlled cap per trade	1% (adjustable 0.1–10%)

#Learn more

• Trading Strategies — How strategies differ in risk profile and target wallet selection
• Security — How your private keys and funds are protected
• How Stratium Works — The full execution pipeline including per-user risk checks
• Risk Management for Memecoin Trading — Complete guide to position sizing, stop-losses, and capital allocation for meme coin trading