Build Risk Management and Position Limit System

[Mathews-25]

Context:
To protect users from over-exposure, StellarSwipe enforces risk limits: max open positions, stop-loss requirements, and balance checks.

Problem:
Create a risk management service that validates trades against user-defined and platform limits before execution.

What Done Looks Like:

• Risk validation before trade execution
• User-configurable risk settings
• Position limit enforcement (max 10 open)
• Stop-loss validation
• Balance reservation for open positions

Folder Structure:

src/
├── risk/
│   ├── risk-manager.service.ts
│   ├── risk-manager.module.ts
│   ├── entities/
│   │   └── risk-settings.entity.ts
│   └── dto/
│       └── risk-settings.dto.ts

Implementation Guidelines:

• Check open position count before new trade
• Validate stop-loss is set and reasonable (5-20% from entry)
• Calculate total exposure across all positions
• Prevent trades if exposure > user limit
• Store risk settings per user (max positions, max exposure %)
• Default limits: 10 positions, 50% max exposure

Risk Checks:

1. Open positions < user limit (default 10)
2. Total exposure < max exposure %
3. Stop-loss within acceptable range
4. Sufficient balance for potential loss

Risk Settings Fields:

• max_open_positions (default 10)
• max_exposure_percentage (default 50)
• require_stop_loss (default true)
• min_stop_loss_percentage (default 5)

Edge Cases:

• User updates limits with existing positions
• Position opened just before new trade
• Partial fills affecting exposure

Validation:

• Trade blocked when limit reached
• Risk settings update correctly
• Exposure calculated accurately

---