Risk Management & Drawdown Guardrails Guide

Unlike cloud-only copy trading platforms that suffer from API lag and latency, Arjuna executes all risk management rules directly inside our compiled MQL Expert Advisor running on your MetaTrader (MT4/MT5) terminal.

The Daily Drawdown Kill-Switch monitors your starting daily balance and real-time floating equity. When cumulative daily loss touches your predefined threshold, the EA takes immediate automated action.

Proprietary trading firms enforce strict daily maximum loss rules (typically 4% to 5%) and maximum total trailing drawdown rules (typically 8% to 10%).

• Safety Buffer Recommendation: Configure your Arjuna daily loss limit 0.5%–1.0% tighter than your prop firm threshold (e.g. set 4.0% if the firm limit is 5.0%) to absorb slippage and swap.
• Balance vs. Equity Tracking: Choose whether your daily stop calculates against Starting Day Balance or Highest Intraday Equity.
• News Trading Guard: Disable signal replication 5 minutes before and after high-impact economic news releases if your prop firm account restricts news execution.

When copying trades between master signal providers and receiver accounts of different sizes, Arjuna supports three flexible sizing models:

• Equity Proportional (Auto-Scale): Automatically adjusts lot size based on account balance ratio. For example, a 1.00 lot trade on a $100k provider account copies as 0.10 lots on a $10k receiver account.
• Fixed Lot Sizing: Ignores the signal provider lot size and executes a fixed lot amount (e.g. 0.05 lots) on every trade.
• Risk Percentage Multiplier: Dynamically calculates lot size based on the trade stop loss distance and your configured risk percentage (e.g. 1.0% of balance per trade).

Hard Lot Cap: You can also specify an absolute maximum lot size per trade (e.g. 5.00 lots) to prevent catastrophic over-leverage even during rapid signal spikes.

Protect your accounts against poor execution conditions with automated terminal-level filters:

1. Maximum Spread Filter: Define the highest acceptable spread (e.g. 2.5 pips). If the broker spread widens during rollover or news, incoming trade signals are discarded.
2. Maximum Slippage Limit: Discard market orders if the execution price drifts by more than your defined tolerance from the signal timestamp.
3. Symbol Whitelist & Blacklist: Restrict trade replication to specific approved instruments (e.g. only EURUSD, GBPUSD, XAUUSD) and block illiquid crosses.

Even if your signal provider does not actively manage stop losses after entry, Arjuna can autonomously protect trade profits on your local terminal.

• Automated Break-Even: Moves stop-loss to entry price (+ optional profit buffer) as soon as the trade reaches a set target in pips or Risk-Reward ratio.
• Step Trailing Stop: Trails the market price by a fixed distance (e.g. 20 pips), stepping forward every 5 pips to lock in profits during trending moves.
• Partial Take-Profit Synchronization: Automatically closes 50% of volume at Target 1 and allows remaining lots to run with trail protection.