> For the complete documentation index, see [llms.txt](https://botlyz.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://botlyz.gitbook.io/docs/english/parametres-de-risque.md). # Risk parameters Botlyz exposes several risk parameters to control your position exposure and frame your capital. This page explains each parameter and its impacts. ## Risk warning Automated trading carries a substantial risk of partial or total loss of the capital committed. Past performance does not guarantee future performance, and no gain is guaranteed. You are solely responsible for your trading decisions and for the configuration of your strategy. Botlyz is an automation software editor, not a fund manager nor a financial adviser. The tool operates in non-custodial mode: your funds and your keys stay with you, the API keys are trade-only (no withdrawal possible), and you sign your configuration yourself (EIP-712). ## Leverage (1 to 20x) ### Definition Leverage increases your market exposure by multiplying the size of the position you open. A leverage of 5x means that your position has a size 5 times greater than your allocated capital. ### Impact Leverage amplifies losses AND gains symmetrically, and it brings the liquidation threshold closer. * **Loss amplification**: with 5x leverage, an adverse move of 2% translates into a 10% loss on your allocated capital, and brings liquidation closer. * **Gain amplification**: symmetrically, a favorable move of 2% gives a +10% variation on your allocated capital, with no guarantee that such a move will occur. * **Liquidation risk**: the higher the leverage, the less the market can move against you before your losses trigger a liquidation (forced closing of the position). ### Mechanical effect by value * A leverage of 1x means no leverage effect. * A leverage of 1 to 3x corresponds to lower exposure and a more distant liquidation threshold. * At 5-10x, a relatively small price variation strongly amplifies gains and losses, and brings the liquidation threshold closer. Botlyz does not indicate any "suitable" value: the choice is entirely yours. * Above 15x, a very small price variation can trigger a liquidation. On Lighter DEX, leverage is applied by adjusting the size of your position, within the exchange's margin account. You retain control of your assets: Botlyz has no access to your funds. ## Allocation (1 to 100%) ### Definition Allocation is the percentage of your available balance deployed in a given strategy. For example, an allocation of 50% means that half of your capital is committed to this strategy, the other half remaining in reserve. ### Global constraint The sum of all allocations on the same exchange cannot exceed 100%. If you configure three strategies on the same exchange with allocations of 40%, 35%, and 25%, you reach exactly 100%. ### Impact * **Capital exposed**: an allocation of 60% means that 60% of your balance is committed and can be affected in an adverse scenario. * **Resilience**: keeping a portion in reserve allows you to cover trading fees and ongoing position adjustments. * **Room to maneuver**: allocating 100% leaves no margin and can lock up all of your funds. ### Mechanical effect of allocation * **Concentration and distribution**: concentrating the allocation on a single strategy increases concentration risk; spreading it across several mechanically reduces it. The chosen distribution is your decision alone. * **Unallocated portion**: an unallocated portion of the balance remains available to cover discrepancies and fees. The distribution of your capital is your decision. * **Evolution over time**: an allocation can be adjusted at any time, without any past result guaranteeing a future result. Allocation choices are your decision alone. ## Stop-Loss (%) ### Definition The stop-loss is a loss threshold, expressed as a percentage relative to the entry price of the position. When the market falls (LONG position) or rises (SHORT position) beyond this threshold, the position is automatically closed to limit losses. ### Example * You enter LONG on BTC at 50,000 USD with a stop-loss of 5%. * If BTC falls to 47,500 USD, the position is closed (loss of about 5% on the position). * This limits a larger loss if BTC continues to fall. ### Impact * **Tight stop-loss (2-3%)**: quick closing in case of a reversal. Reduces losses, but can trigger on minor volatility (false signal). * **Wide stop-loss (10-15%)**: leaves more room for the price movement, but increases the realized loss if the market does not recover. * **No stop-loss**: exposure to a potentially total loss of the allocated capital. ### Usage benchmarks * **Short-duration strategies**: stop-loss 2-5% to exit losing positions quickly. * **Medium-term strategies**: stop-loss 5-10% to tolerate volatility. * **High volatility**: adapt the stop-loss to the asset's historical volatility (a major asset is generally less volatile than a low-capitalization altcoin). ## SL/TP slippage (1 to 50%, default 10%) ### Definition SL/TP slippage is an **execution tolerance margin** applied to stop-loss and take-profit levels. It aims to ensure that your closing orders are actually filled, even in case of an abrupt price jump (gap). ### Technical operation When a stop-loss or take-profit is triggered, two prices are sent to the exchange: 1. **Trigger price**: the exact level at which the order must trigger (for example 47,500 USD). 2. **Execution price**: the price at which the order will attempt to fill (for example 47,500 × 0.90 = 42,750 USD for a stop-loss on a LONG position). The difference between these two prices corresponds to the tolerated slippage margin. ### Concrete example **LONG scenario with a stop-loss at 47,500 USD:** * **Slippage 10%**: the closing order can execute down to 42,750 USD (47,500 × 0.90). * Advantage: closing much more likely, even if the price jumps directly from 48,000 to 42,000 USD. * Disadvantage: you may realize a larger loss than expected if the price collapses then rebounds immediately. * **Slippage 2%**: the order can execute down to 46,550 USD (47,500 × 0.98). * Advantage: better execution price if the market stays orderly. * Disadvantage: risk of non-execution (the price crosses the zone without touching it), leaving the position open and the losses accumulating. ### Impact * **Tight slippage (1-5%)**: optimizes the closing price, but exposes you to a risk of non-fill in case of extreme volatility. * **Moderate slippage (10%)**: default balance, fill very likely at an acceptable price. * **Wide slippage (20-50%)**: closing almost certain, but at a price potentially very far from the trigger (worsened loss). ### Usage benchmarks * **Relatively calm markets (BTC, ETH)**: slippage 5-10%. * **Volatile altcoins**: slippage 15-20%. * **Extreme conditions (crash, liquidity drying up)**: slippage 30-50%. * **Default**: 10%, a compromise suited to most conditions. ## Summary | Parameter | Range | Starting benchmark | Risk if too low | Risk if too high | | ------------------ | ---------- | ------------------ | ------------------------ | -------------------- | | **Leverage** | 1-20x | 2-5x | Limited exposure | Frequent liquidation | | **Allocation** | 1-100% | 30-50% | Capital barely committed | No reserve | | **Stop-Loss** | variable % | 5-10% | Exit too frequent | Amplified loss | | **SL/TP slippage** | 1-50% | 10% | Non-execution | Additional loss | These benchmarks are starting points, not personalized recommendations nor a promise of results. It is up to you to adapt them to your risk tolerance. ### Example configuration (illustrative, not recommended) ``` Leverage: 2-3x (moderate exposure, more distant liquidation threshold) Allocation: 50% (50% of the balance remains unallocated) Stop-Loss: 7% (closing threshold far from minor volatility) SL/TP slippage: 10% (default value) ``` This example serves only to show the effects of the parameters relative to one another. It does not constitute a recommended setting; any combination of parameters is your decision alone. ### How the parameters interact The parameters are not evaluated in isolation: their effects combine. * Leverage and allocation together determine the total exposure and the distance to the liquidation threshold. * Stop-loss and slippage together determine the maximum tolerated loss and the probability that the closing order is actually filled. * No setting removes the risk of loss, and no past result guarantees a future result. The chosen configuration is your decision alone. ## Costs to know Botlyz applies a single **protocol fee of 10 bps (0.10%)**, automatically deducted on each order via Lighter's "partner attribution" program, capped at 10 bps. This is a protocol fee, deducted and paid out by the platform, and not an invoice nor a Botlyz commission. Botlyz takes no commission on your gains. Lighter platform's own fees (trading fees, funding) apply separately, independently of Botlyz. See the [Fees](/docs/english/frais.md) page for details. ## Support and resources The sizing of your positions is your own decision and depends on your risk tolerance; Botlyz does not provide personalized advice on your trading choices. For any technical question about how the parameters and the tool work, see [Support](/docs/english/support.md). To remember: high leverage and allocation increase exposure and liquidation risk; lower leverage and allocation reduce it. The trade-off between the risk accepted and the return sought is your decision alone. To go further, also see the [risk warning](/docs/english/avertissement-risques.md) and the [Security and non-custodial](/docs/english/securite-non-custodial.md) page. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://botlyz.gitbook.io/docs/english/parametres-de-risque.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.