Three levels of control
Good risk architecture has three layers: per-trade limits (how much you lose on one position), session limits (how much you lose in a day), and portfolio limits (how much drawdown you tolerate before stopping entirely).
Set them before you start
Risk controls set after a losing streak are emotional, not rational. Set them during the strategy design phase, when you can think clearly about what you would want to happen in a bad scenario.
Ready to put this into practice?
Apply risk controls to your strategy →Test them in simulation
Run the strategy through a simulated drawdown to see how the limits interact. Make sure each layer is wide enough to let the strategy breathe, but tight enough to stop real damage.