# Orchestration & Risk

**1) Diversified Allocation & Limits**\
\
1.1 Per-method and portfolio-level limits for VaR, max drawdown, exposure, and correlation.\
1.2 Regime detection (trend, chop, volatility expansion) adjusts risk budgets and order sizing.\
1.3 Stability via diversification: if one method underperforms at a given time, others are designed to offset.

**2) Execution Controls**\
2.1 Hedge-first sequencing for multi-leg trades to minimize directional exposure.\
2.2 Latency budgets with failover routing; partial-fill logic and re-quotes as conditions change.\
2.3 Price-impact modeling and slippage ceilings; position netting to reduce footprint.

**3) Kill-Switches & Scale Rules**\
3.1 Automatic de-risk if KPIs breach thresholds (e.g., tracking error, hedge slippage, IL variance).\
3.2 Scale capital only after minimum live sample, target Sharpe/Sortino, and bounded slippage variance.\
3.3 Circuit breakers on oracle divergence, venue incidents, or abnormal volatility.

**4) Profit Recognition Discipline**\
4.1 Only realized PnL counts; unrealized marks do not.\
4.2 Loss carryforward/high-water mark ensures no revenue during recovery periods.


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