The 6% Stop-Loss Rule: How We Keep Drawdown at 1.81%

The number one reason traders blow their accounts isn't bad entries — it's poor risk management. A single trade without a stop-loss can wipe out months of profits. Here's the exact framework TrendRider uses to protect capital.

Rule 1: 6% Maximum Stop-Loss Per Trade

Every TrendRider signal includes a predefined stop-loss that never exceeds 6% from entry. This means even in the worst-case scenario, a single trade can only lose 6% of the position size. Most of our stops are tighter — the 6% is the absolute maximum.

Rule 2: 2% Portfolio Risk Per Position

We never risk more than 2% of total portfolio value on any single trade. If your portfolio is $10,000, no trade risks more than $200. This means even a string of 5 consecutive losses only costs 10% — painful but recoverable.

Rule 3: Multi-Target Take Profits

Every signal has 3 take-profit levels with position scaling:

• TP1 (30% of position) — Conservative target, usually 3-4% above entry. Locks in profit early.
• TP2 (40% of position) — Mid-range target, 5-7%. Where most of the profit comes from.
• TP3 (30% of position) — Aggressive target, 8-12%. Captures extended moves.

Rule 4: No Averaging Down

TrendRider never adds to losing positions. If a trade hits the stop-loss, it closes. No exceptions. No “dollar-cost averaging into a trade.” This single rule prevents the catastrophic losses that destroy accounts.

The Result: 1.81% Max Drawdown

These four rules combined produce a maximum drawdown of just 1.81% across all backtested trades. For comparison, the average retail trader experiences 20-40% drawdowns. Professional hedge funds target 10-15%. Our 1.81% is in a different league entirely.

Why This Matters for You

With Cornix auto-trade, these risk management rules are enforced automatically. You don't need discipline — the algorithm handles it. Every stop-loss is placed before the trade opens. Every take-profit scales exactly as designed.