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Practical Understanding

The non-negotiables for any SFZ operator

If you skip these, the rest of the learning path will not protect you.

Checklist Priority: Capital preservation Failure mode: Small errors compounding Mindset: Kill weak processes early
Key Takeaways What to take from this lesson
Red flags Hard risk rules
Risk Frame The page to remember
  • Do not let recent outcomes rewrite your risk standards.
  • Do not deploy anything you are not prepared to stop.
  • Do not trade a strategy you cannot explain under pressure.
Checklist

Red flags

  • You cannot explain why the strategy still deserves capital.
  • You keep widening tolerances because the loss feels temporary.
  • You are changing rules faster than you can validate them.
Checklist

Hard risk rules

  • No bot gets capital without explicit stop conditions.
  • No size increase happens without evidence from review and validation.
  • No weak strategy stays alive because of attachment or sunk cost.
Checklist

Before you go live

  • Know how the strategy fails.
  • Know how the operator intervenes.
  • Know what level of damage still counts as acceptable variance.