risk-assessment.md

Trade risk assessment evaluates spread volatility, session liquidity, and macro news timing to filter hidden market microstructure risks before entry. It returns a bounded safety decision to prevent executing technically valid but fundamentally unsafe setups.

Multi-timeframe structure alignment checks whether higher and lower chart timeframes agree on market direction. This risk gating mechanism prevents entries when conflicting timeframes expose correlated risk, ensuring the setup has structural support before execution.

Checking macro news timing and spread volatility involves filtering trade entries around high-impact economic events and measuring bid-ask spread expansion. This prevents execution during illiquid sessions or news shocks that can cause slippage and capital loss.

Trade risk assessment outputs bounded risk levels (UNSAFE, HIGH, MEDIUM, LOW RISK) alongside explicit operational actions like WAIT or PREPARE ONLY. This confidence gating enforces capital protection rules and generates structured alerts for rapid execution decisions.

Yes, confidence gating evaluates correlated exposure across multiple FX pairs to prevent over-concentration. By checking multi-timeframe structure and session liquidity together, it rejects setups where correlated positions would amplify overall portfolio risk.

You should not use automated trade risk assessment when real-time market data feeds are unavailable or delayed. Without accurate spread volatility and session liquidity inputs, the confidence gating cannot produce reliable execution decisions for FX or commodity trading.