# How to Reduce Futures Trading Risks

> Practical tips to lower liquidation risk in futures trading using margin management, backtests, filters, and smart bot configuration.

Choosing the right deposit amount to allocate to a bot is a key factor.
A common beginner’s mistake is setting the deposit too high, which, during an unfavorable market move, quickly leads to position liquidation.

Recommendations depend on the margin type and whether a stop-loss is used.

## Isolated Margin and Cross Margin with Stop-Loss

* The liquidation risk or loss from a stop-loss should not exceed **1% of the trading account balance**.
* Always calculate the potential loss in advance (using the “Preview” option in the bot or via backtesting).

> Isolated margin liquidation in a DCA bot may not be "visible" in a backtest if the bot has high leverage and large order spacing. It must be calculated manually using the formula in the exchange documentation.

## Cross Margin without Stop-Loss

1. Run a backtest over the longest possible period (preferably 1 year) including strong market dumps. Determine the MDD (Maximum Drawdown / Max Floating Loss / Maximum Adverse Excursion).

2. If the MDD is less than the deposit — keep `Deposit × 2` in the account.
   If the MDD is greater than the deposit — keep `MDD × 2`.
3. For multiple bots, the sum of all MDD values should not exceed half of the account balance.

## General Recommendations

* Don't trust "good" backtests with a short grid (with little overlap), this may be the result of over-optimization or coincidence.
* Adjust deposit and leverage so that the MDD is lower than the deposit.
* Distribute bots across subaccounts (5–10 per account).
* Regularly withdraw profits to separate accounts.
* Freed-up funds can be allocated to new bots or other purposes.

## How to Reduce MDD

* Lower the leverage.
* Increase “% coverage” and “% martingale”.
* Decrease the “Logarithmic distribution” parameter.
* Use averaging based on indicator signals.
* Add entry filters based on higher timeframes.
* Restrict entries after sharp rises or drops.

## Choosing a Trading Pair

* Prefer BTC, ETH, or coins from the CoinMarketCap top-20.
* Study the pair’s behavior during market dumps.
* Don’t set “Price Change Coverage” too low.

## Entry Point Filters

Filters won’t guarantee protection from drawdowns, but they help avoid entering long at local highs or short at local lows.

## Examples of Strategies and Risks

**High-risk, short grid (up to 10% coverage)** — allocate minimal funds, be ready for long holding periods, use protection against entry after sharp moves.
**High-risk without supporting margin** — use a separate subaccount, withdraw profits regularly.
**High martingale % and wide grid** — modest profit in calm markets, strong resilience to dumps.
**Rare entry strategies** — the bot waits longer for a signal, allowing many strategies on different coins to run in parallel.
**No filters** — requires high martingale, wide grid, and large deposit.

## Conclusion

Don’t risk blindly. First invest time in testing and setup, then invest money.
The market will always give you opportunities if you approach it prepared.

:::caution[Important!]
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