Risk management system

Similar to problems with quantifying and measuring risk estimates for a trading strategy in the absence of a very accurate backtester, it is also difficult to build an optimal risk-management system. Also, we saw in the chapter on risk management that we want to not only build a risk management system, but also a system of slowly increasing trading exposure and risk limits after good performance, and lower trading exposure and risk limits following a poor performance. Without a good backtester, this aspect of trading strategy development and deployment suffers and causes issues when deployed to live markets as it deviates from historical expectations.

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