Grid trading needs a risk layer more than anything else you'll run

Following the grid posts, a caution. A grid is the only common retail strategy where the default behavior when things go wrong is buy more. Everything else stops or stops out. This one accelerates into the decline by design. So the risk limits matter more here, not less: Total capital allocated to the grid, decided before you start and not topped up mid-decline. The temptation to "extend the grid a bit lower" is the mechanism by which a bounded strategy becomes an unbounded one. A hard stop below the lower boundary, as an amount you accept losing rather than a price you believe in. And a maximum position size that the grid cannot exceed regardless of how many levels have filled. If you can't state all three as numbers before you turn it on, you're not running a grid, you're running an accumulation plan with a nice interface.