# Risk Management

Risk management controls how much the EA is allowed to risk and when trading should stop or be reviewed.

BananaEA can help apply risk settings, but it does not remove trading risk. Users remain responsible for account size, broker choice, position sizing, and monitoring.

## Core Principles[​](#core-principles "Direct link to Core Principles")

1. Risk only money you can afford to lose.
2. Start on demo before live use.
3. Use small risk while learning the EA.
4. Confirm lot-size calculations before live trading.
5. Pause the EA if position size or drawdown looks wrong.

## Risk Methods[​](#risk-methods "Direct link to Risk Methods")

BananaEA may support several position sizing methods depending on the package and version.

### Risk Percentage[​](#risk-percentage "Direct link to Risk Percentage")

Risks a percentage of account balance or equity per trade.

Example:

```
Account balance: 10,000

Risk setting: 1%

Maximum planned risk per trade: 100
```

The final lot size still depends on stop distance, tick value, contract size, and broker rules.

### Fixed Lot[​](#fixed-lot "Direct link to Fixed Lot")

Uses the same lot size for each trade.

This is simple, but the actual money risk can change from trade to trade if stop distance changes.

### Fixed Amount[​](#fixed-amount "Direct link to Fixed Amount")

Uses a fixed account-currency amount per trade.

This can make budgeting easier, but the EA still depends on correct broker specifications.

## Broker Specification Checks[​](#broker-specification-checks "Direct link to Broker Specification Checks")

Before live use, verify:

* Contract size
* Tick value
* Minimum lot
* Lot step
* Stop level
* Margin requirements

Use demo or very small live size to confirm the calculated lot matches your expectation.

## Drawdown[​](#drawdown "Direct link to Drawdown")

Drawdown is the decline from an account or equity peak to a later low.

Example:

```
Peak equity: 12,000

Later equity: 10,800

Drawdown: 10%
```

Backtest drawdown is historical. Live drawdown can be worse because of spread, slippage, execution, broker rules, and market conditions.

## Drawdown Review Plan[​](#drawdown-review-plan "Direct link to Drawdown Review Plan")

Before using the EA live, decide:

* Maximum account drawdown you are willing to tolerate.
* Daily loss level where you will stop and review.
* Whether you will reduce risk after a drawdown.
* When you will stop trading and ask for support.

Do not decide these rules during emotional trading conditions.

## Exposure[​](#exposure "Direct link to Exposure")

If multiple trades can be open at the same time, total exposure can be higher than per-trade risk.

Example:

```
Risk per trade: 1%

Maximum open trades: 3

Possible planned exposure: up to 3%
```

Check `MaxOpenTrades` and any multiple-trade settings before enabling live trading.

## Spread Protection[​](#spread-protection "Direct link to Spread Protection")

Spread filters can help prevent entries during expensive trading conditions.

Do not widen spread limits only to force more trades. A wider spread can change the economics of the setup.

## Practical Checklist[​](#practical-checklist "Direct link to Practical Checklist")

* 
  Correct production version installed.
* 
  Correct broker symbol selected.
* 
  Correct preset or inputs loaded.
* 
  Risk method understood.
* 
  Lot size checked on demo.
* 
  Maximum open trades checked.
* 
  Drawdown limit decided before trading.
* 
  Broker specifications verified.
* 
  AutoTrading enabled only when ready.

## When To Stop And Review[​](#when-to-stop-and-review "Direct link to When To Stop And Review")

Stop and review if:

* Lot size is unexpected.
* Drawdown exceeds your planned limit.
* Orders are rejected repeatedly.
* Spread is much higher than usual.
* The broker changes symbol specifications.
* You do not understand why the EA opened or managed a trade.