Risk & Position Management¶

Tools for sizing positions, setting stops, assessing trade risk, and stress-testing your portfolio against hypothetical scenarios.

calculate_position_size¶

Calculate the optimal position size for a trade based on risk management rules.

Auth required: No

Supports two sizing methods:

Fixed Fractional -- risk a fixed percentage of your account per trade (default 2%).
Kelly Criterion -- mathematically optimal sizing based on your historical edge. Uses Half-Kelly (industry standard) to reduce volatility.

Parameters¶

Name	Type	Required	Default	Description
`account_balance`	number	Yes	—	Total account balance in USD
`entry_price`	number	Yes	—	Planned entry price
`stop_loss_price`	number	Yes	—	Stop-loss price level
`risk_percent`	number	No	`2`	Max percentage of account to risk per trade (0.1–100)
`method`	string	No	`fixed_fractional`	Sizing method: `fixed_fractional` or `kelly`
`win_rate`	number	No	—	Historical win rate as a percentage (required for Kelly)
`avg_win_loss_ratio`	number	No	—	Average win / average loss ratio (required for Kelly)
`leverage`	number	No	`1`	Leverage multiplier (1–125, where 1 = no leverage)

Example¶

"I have $10,000 and want to buy BTC at $65,000 with a stop at $62,000.
How much should I buy?"

Response¶

Returns a formatted breakdown including:

Trade Parameters -- account balance, entry price, stop-loss, risk per unit, risk budget
Position Size -- risk amount in USD, position size in units and USD, portfolio allocation percentage
Leverage details (when leverage > 1) -- leveraged exposure, margin required, estimated liquidation distance
Kelly Analysis (when method is kelly) -- full Kelly fraction, Half-Kelly used, expected value per dollar risked

Example output:

## Position Size Calculator

**Direction:** Long
**Method:** Fixed Fractional

### Trade Parameters

| Parameter | Value |
|-----------|-------|
| Account Balance | $10,000.00 |
| Entry Price | $65,000.00 |
| Stop-Loss | $62,000.00 |
| Risk per Unit | $3,000.00 (4.62%) |
| Risk Budget | 2.00% of account |

### Position Size

| Metric | Value |
|--------|-------|
| Risk Amount | $200.00 |
| Position Size | 0.066667 units |
| Position Value | $4,333.33 |
| Portfolio Allocation | 43.3% |

calculate_stop_loss¶

Calculate optimal stop-loss and take-profit levels for a crypto trade using three independent models.

Auth required: No

The tool fetches OHLC data automatically from the exchange and runs the calculation through three models:

Volatility (ATR) -- stop based on Average True Range multiplied by a configurable factor
Structure -- stop based on recent swing highs/lows with a buffer
Regime (Adaptive) -- selects the best model based on trend vs. range detection

Parameters¶

Name	Type	Required	Default	Description
`asset`	string	Yes	—	Crypto asset symbol (e.g. `BTC`, `ETH`, `SOL`)
`entry_price`	number	Yes	—	Your entry price for the trade
`direction`	string	No	`long`	Trade direction: `long` or `short`
`interval`	string	No	`1d`	Candle interval: `1h`, `4h`, or `1d`
`atr_multiplier`	number	No	`1.5`	ATR multiplier for the volatility-based stop (0.5–5)

Example¶

"Where should I set my stop-loss if I buy ETH at $3,200?"

Response¶

Returns:

Market Context -- market state (trending/ranging/volatile), ADX trend strength and direction, ATR value
Stop-Loss Levels -- one level per model (Volatility, Structure, Regime) with a recommended stop-loss and risk percentage
Take-Profit Targets -- levels at 1.5:1, 2:1, and 3:1 risk-reward ratios, plus a structure-based target from swing levels, with a recommended take-profit

If risk exceeds 5%, the response includes a warning to consider reducing position size.

Example output:

## ETH — Stop-Loss & Take-Profit Levels

### Market Context

| Metric | Value |
|--------|-------|
| Market State | Trending |
| Trending | Yes |
| Trend Strength | Strong |
| Trend Direction | Up |
| ADX (14) | 32.5 |
| ATR (14) | $125.40 |

### Stop-Loss Levels

| Model | Level | Method |
|-------|-------|--------|
| Volatility (ATR) | $3,011.90 | ATR x multiplier |
| Structure | $2,980.00 | Swing high/low + buffer |
| Regime (Adaptive) | $3,011.90 | Trend-aware selection |

**Recommended Stop-Loss:** $3,011.90 (5.88% risk)

### Take-Profit Targets

| R:R | Level |
|-----|-------|
| 1.5:1 | $3,482.15 |
| 2:1 | $3,576.20 |
| 3:1 | $3,764.30 |
| Structure | $3,650.00 |

**Recommended Take-Profit:** $3,576.20

assess_trade_risk¶

Assess the technical risk of entering a trade on a specific crypto asset.

Auth required: No (authenticated users may receive enhanced context)

Runs technical analysis including RSI, ADX, MACD, volume analysis, and trend detection to evaluate whether current conditions favor the intended trade direction.

Parameters¶

Name	Type	Required	Default	Description
`asset`	string	Yes	—	Crypto asset symbol (e.g. `BTC`, `ETH`, `SOL`)
`direction`	string	No	`long`	Trade direction: `long` or `short`
`trade_market`	string	No	`USDT`	Quote currency
`exchange`	string	No	`BINANCE`	Exchange for price data
`account`	string	No	`SPOT`	Account type: `SPOT` or `FUTURES`

Example¶

"Should I go long on SOL right now?"
"What's the risk of shorting BTC?"

Response¶

Returns:

Indicator table -- RSI (with oversold/overbought signal), ADX (trend strength), MACD, volume, and trend direction
Overall assessment -- a recommendation based on the combined indicators

Example output:

## SOL — Trade Risk Assessment (LONG)

| Indicator | Value | Signal |
|-----------|-------|--------|
| RSI (14) | 42.3 | Neutral |
| ADX | 28.7 | Strong trend |
| MACD | 0.0245 | Bullish crossover |
| Volume | Above average | Confirming |
| Trend | Up | Moderate |

**Assessment:** Conditions moderately favor a long entry.
RSI is neutral with room to run, trend is intact, and volume confirms.

simulate_scenario¶

Simulate how your portfolio would be affected by a hypothetical market scenario.

Auth required: Yes

Accepts natural language scenario descriptions and projects the impact on your current holdings. The engine parses the scenario into price movements and applies them to your portfolio.

Parameters¶

Name	Type	Required	Default	Description
`scenario`	string	Yes	—	Free-text scenario description (3–500 characters)

Valid scenario examples:

"BTC drops 30%"
"ETH doubles in price"
"Full market crash like 2022"
"Bitcoin hits $100,000"
"All altcoins drop 50%"

Example¶

"What happens to my portfolio if BTC crashes 40%?"

Response¶

Returns:

Portfolio Impact -- current value, projected value, total impact in USD and percentage
Per-Asset Impact -- table showing each holding with current value, projected value, and percentage change
Analysis -- narrative summary of how the scenario would affect your overall portfolio

Example output:

## Scenario Simulation

**Scenario:** BTC drops 40%

### Portfolio Impact

| Metric | Value |
|--------|-------|
| Current Value | $25,400.00 |
| Projected Value | $18,120.00 |
| Impact | -28.66% |
| Impact (USD) | -$7,280.00 |

### Per-Asset Impact

| Asset | Current | Projected | Change |
|-------|---------|-----------|--------|
| BTC | $15,000.00 | $9,000.00 | -40.00% |
| ETH | $6,400.00 | $5,440.00 | -15.00% |
| SOL | $2,800.00 | $2,520.00 | -10.00% |
| USDT | $1,200.00 | $1,200.00 | +0.00% |

### Analysis

Your portfolio is heavily weighted toward BTC (59%), making it
highly sensitive to this scenario. Consider diversifying or
hedging your BTC exposure.

Safety Annotations¶

Tool	readOnlyHint	destructiveHint	idempotentHint
calculate_position_size	true	false	true
calculate_stop_loss	true	false	true
assess_trade_risk	true	false	true
simulate_scenario	true	false	true

All four tools are read-only and never modify your account. calculate_position_size is a pure calculation that runs entirely client-side. The other three fetch live market data but make no changes.