Skip to main content

​
How It Works

Volatility Protection
Allocate additional capital to prevent liquidation during short-term price swings that quickly recover. Adaptive Defense
Automatically deploy reserved capital when positions approach liquidation, giving markets time to recover. Smart Recovery
Designed for high-volatility scenarios where prices swing dramatically but return to trend.

​
Setting Up Protection

Capital Allocation
Set the maximum percentage of your capital to reserve for fluctuation protection. Example: With 10% Fluctuation Guard on a 1,000 USD position, an additional 100 USD protects against temporary liquidation. Automatic Activation
Guard activates when position reaches standard liquidation level, temporarily extending your position with reserved capital.

​
Configuration Process

1

Set Protection Level

Choose the percentage of capital to allocate for fluctuation protection (1-100%).
2

Review Risk Parameters

Understand your total capital at risk including guard allocation.
3

Monitor Position

Track both standard liquidation level and guard depletion threshold.
4

Manage Exposure

Adjust or close positions before guard capital is fully depleted.

​
Benefits & Risks

Advantages
  • Protection against temporary market volatility
  • Prevents premature liquidation during price spikes
  • Gives positions time to recover from short-term adverse moves
  • Reduces stress from watching volatile positions
Risk Considerations
  • Increases total capital at risk by guard percentage
  • Guard depletion leads to larger losses if market doesn’t recover
  • May encourage larger position sizes due to false sense of security
  • Not effective against sustained directional moves

​
Best Practices

Appropriate Usage
  • Use in highly volatile but mean-reverting markets
  • Ideal for short-term event-driven predictions
  • Most effective with 5-15% guard allocation
Risk Management
  • Never exceed 20% guard allocation
  • Monitor total capital exposure (position + guard)
  • Close positions before guard depletion if trend continues
  • Use smaller position sizes when employing guards
Market Selection
  • Best for markets with historical volatility patterns
  • Avoid in trending markets with clear directional bias
  • Consider market liquidity and typical price ranges

​
Example Scenarios

Scenario 1: Successful Protection
Position at 60¢ with 50¢ liquidation point. Price drops to 48¢ triggering guard, then recovers to 65¢. Guard capital preserved. Scenario 2: Guard Depletion
Position continues declining past guard threshold. Total loss includes original position plus guard allocation.
Fluctuation Guard increases your maximum potential loss. Only use when you understand and accept the additional risk.