Who this is for — Anyone who wants to turn drawdown from an emotional event into a manageable process — single strategy or multi-system portfolio.
Drawdown control is a rule set limiting equity decline depth and duration: predefined thresholds → automatic actions (size ↓, selectivity ↑, halt trading) → stepwise re-entry, not revenge recovery.
In plain terms — Three alarm levels on the account: yellow reduce, red stop, green re-enter only with evidence.
Three-level protocol
| Level | Typical trigger | Action |
|---|---|---|
| Alert | −5% to −7% equity | Size −20/30%, filter marginal setups |
| Defense | −8% to −9% | Size ↓↓, max trades ↓, selectivity ↑ |
| Stop | −10% or weekly hit | Flat + mandatory review |
Re-entry: incremental steps after N positive sessions or paper test — never full size in one jump.
Pairs with daily stop and weekly stop (Silver).
Multi-strategy portfolio
- Thresholds per strategy and aggregate
- One component stopped must not drag others beyond aggregate cap
- Strategy suspension at defense/stop level
Typical mistake — Increasing size to «recover fast» as soon as drawdown slows — portfolio-level revenge.
Example — Alert −6%: size 1R → 0.5R. Stop −10%: flat 5 days + review. Re-entry: 0.5R × 3 green sessions → 0.75R → 1R.
Summary card
- Input: equity curve, loss streaks, vol regime.
- Output: level table in playbook.
- Review: calibrate thresholds post backtest/out-of-sample.
Gold path — Risk control module. Index: Gold path.