PatternX risk controls: what is checked before every order

One gate for every order

PatternX separates finding a trade from allowing it. The pattern engine decides whether a setup becomes a signal, and on Pro and Elite PatternX AI can veto or re-weight it. Whether a signal becomes an order is decided by a separate risk engine: a fixed sequence of rules that every order passes, manual or automatic, paper or live. It runs at the moment of execution, right after you approve a signal in MANUAL mode or straight away in AUTO mode, so it judges your account as it stands then.

Nothing on this path is discretionary (deterministic trading). PatternX AI cannot change a stop, a size or a risk check, and the language models PatternX uses to write explanations never sit on the risk or execution path. The checks run cheapest first; the first one that fails refuses the order and records why.

Two rules act even earlier, when a signal's targets are recomputed with your own settings: a signal whose reward:risk is below 1 is dropped, and Elite's optional minimum reward:risk, ATR band and maximum spread filters apply there.

The checks, in order

Kill switches

A platform-wide pause set by PatternX, your own pause trading switch and an account ban each stop every new order. They come first because nothing else matters while one is on.

Direction and symbol lists

Allow long and allow short block a whole side when switched off. A blacklist blocks the symbols on it; a whitelist, once it has entries, allows only those symbols.

Trade counts

Your plan's daily quota is checked first: Free 2 trades a day, Starter 20, Pro 100 (5 while your account is in AI mode) and Elite unlimited (plans). Your own max daily trades applies on top: 10 crypto and 10 traditional by default, counted separately.

The US pattern-day-trader guard

Under FINRA Rule 4210, a margin customer who makes four or more day trades within five business days, when those are more than 6% of the account's trades in that window, is a pattern day trader and must keep at least $25,000 of equity in the account on any day they day trade (FINRA on day trading). PatternX's guard is on by default for live securities trades on US margin brokers: while equity is below $25,000, it refuses the round trip that would become the fourth day trade in five business days. It counts only trades placed through PatternX, so your broker's own count is the one that decides. More in the pattern day trader rule.

Exposure and loss limits

• Max open trades: 3 crypto and 3 traditional.
• Daily loss limit: new orders stop once the day's net realised loss since 00:00 UTC reaches 10% of your current balance. Open, unrealised losses do not count until they are closed.
• Per-symbol bench: after 5 losing trades on one symbol in a day, that symbol is refused for the rest of the day.
• Loss cooldown: after 3 losses in a row, no new orders for 60 minutes, on every plan.

Elite Advanced Safety Halts and filters

All are off by default. The halts stop trading on a daily losing-trade count, a consecutive-loss lockout, a daily profit lock-in, a losing-day streak or an intraday give-back from the day's peak. The order-time filters add a trading-session window, a per-symbol cooldown after a loss, a portfolio heat cap and a correlation guard that limits open positions per group: BTC, ETH, L1, L2, MEME, DEFI, AI, EXCHANGE, USD_FX, SPX, NDX, DOW, RUT and SEMI.

Sizing and free margin

Size comes from risk, not conviction: 1% of balance ÷ the distance from entry to stop. Optional settings cap the position value and set a minimum and maximum margin per trade. Leverage defaults to 3× on crypto (maximum 25×) and 2× on traditional markets (maximum 10×), and each venue caps it further, for example Binance 20×, Bybit 25×, Hyperliquid 25×, IBKR 4× and Alpaca 2×. Leverage changes the margin a trade locks up, not its size or its risk.

Last, the free-margin check fits the trade into margin not already committed, keeping a 2% buffer, and refuses anything below $10 notional.

Controls at a glance

Protection after the fill

The stop goes to the venue

A live entry is a market order (on IBKR, a marketable limit at the bid or ask ±0.5% that falls back to market). Right after the fill, PatternX places the stop-loss at the venue, with up to 3 attempts, using the venue's own mechanism: reduce-only trigger orders on most crypto exchanges, Bybit's native trading-stop, position TP/SL on Bitget and Hyperliquid, a stop or stop-limit with an OCO take-profit on IBKR, an OCO order on Alpaca and an attached stop and limit on IG.

If the venue refuses the stop

PatternX does not hold a live position without a stop. If the venue will not accept one, the position is closed at market immediately (recorded as no_stop_protection) and you are alerted. If that close also fails, the trade is flagged and an UNPROTECTED alert goes out.

Watchdog and reconciliation

A position loop runs every 5 seconds: it marks positions to market and ignores single-cycle jumps above 25% as bad ticks. Every 60 seconds, live positions are reconciled with what the venue reports. A watchdog alerts when a live position cannot be priced: after 3 minutes if no stop rests at the venue, after 10 minutes if one does. On IBKR, PatternX also checks every 2 minutes that the broker stop still rests and re-places it if it has gone missing; Alpaca, OANDA, Saxo, Tradier and IG don't get this check yet.

Trailing stop and break-even run in PatternX's loop

The optional trailing stop, which only tightens, and the break-even move, which shifts the stop to entry after a set gain, are managed by PatternX's software loop, not changed at the venue. They work only while PatternX runs and can reach the venue, and they exit with a reduce-only market order, so slippage applies. If PatternX cannot reach the venue, your original stop still rests there; the trailed level does not.

On paper, the same 5-second loop simulates stops and targets, fills at the live bid or ask, estimates fees at 0.05% per side and starts from $10,000. On manual-only venues PatternX sends signals only; placing and protecting the trade is up to you.

The 24-hour testing bypass

To test a new connection without waiting out a cooldown, you can switch on the 24-hour limits bypass (testing) in your risk settings. Until it expires or you end it, it skips your max daily trades, the daily loss limit, the loss cooldown, the per-symbol bench, the Elite Advanced Safety Halts and the Elite per-symbol cooldown. It never lifts the kill switches, direction toggles, lists, plan quota, pattern-day-trader guard, max open trades, the other Elite filters, sizing or the free-margin check, and live stops are still placed at the venue. It removes the brakes built for losing streaks, so use it on paper or with small size.

What these controls cannot do

• A stop at the venue is an order, not a price promise: in a gap or a fast market it fills at the next available price.
• The daily loss limit counts realised losses only, and none of these limits closes an open position.
• The pattern-day-trader guard cannot see trades made outside PatternX.
• Software-managed exits pause whenever PatternX cannot reach the venue.
• Most limits are your own settings, and you can loosen them.

See PatternX's limitations, how market data feeds these checks, and the risk controls feature.