Ordinary drops versus crashes
A crash is a fast, correlated decline where usual diversification stops helping. Rules tuned for calm markets often trigger too late in these conditions.
Crash protection works on thresholds — a percentage move over a short window — rather than on slow-moving averages.
De-risking rules
Typical patterns: halt new entries when a threshold move is detected, reduce exposure in steps rather than all at once, and require a stabilisation period before re-entering.
Stepped reduction is usually better than a single exit — it protects capital without guaranteeing you sell the exact low.
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Add crash protection to your strategy →Gaps and overnight risk
Equities and ETFs can gap through a stop overnight. Position sizing, not the stop level, is what limits damage in that scenario — assume your stop may fill worse than planned.