#Copy-Trading Risk Controls & Circuit Breakers
To protect copy-trading capital, the SmartLiquid engine runs multi-layer risk checks before orders touch the chain. All copy signals must pass 100% of the following logic, otherwise they are securely intercepted.
1. Slippage Rejection Guard
At the exact millisecond of execution, the risk engine calculates target orderbook depth. If execution slippage exceeds the user's configured tolerance, the order is intercepted and rejected locally to prevent adverse execution or illiquid market losses.
2. Max Position Size Cap
If the copied trader fires a massive position signal, or if their order ratio translates to a size exceeding the user's "Max Size Per Trade", the engine will not fail the order. Instead, it dynamically caps it down to the safety threshold to preserve available margin.
3. Circuit Breaker Isolation
To handle fast-chopping markets, network latency, or exchange rate limiting, if a specific copy-trading link encounters 3 consecutive failures on the same asset, the engine triggers an automatic circuit breaker. This freezes the relationship and halts all subsequent signals until manual reset.