from typing import Any, Dict, Optional
class RiskGuardian:
def __init__(self):
pass
def validate_trade(self,
side: str,
symbol: str,
amount_usd: float,
portfolio_value: float,
sentiment_score: float = 0.0,
daily_loss_pct: float = 0.0,
current_drawdown_pct: float = 0.0,
force_approval: bool = False,
price: Optional[float] = None,
last_close_price: Optional[float] = None,
day_trades_count: int = 0) -> Dict[str, Any]:
"""
Validate a trade against safety rules.
"""
# Rule 0: System State Checks
# Max Drawdown Check (10%)
# If drawdown is 10%, we only allow reducing risk (SELLs), not BUYs?
# Or we block everything? Usually block BUYs.
if current_drawdown_pct >= 0.10 and side.lower() == 'buy':
return {
"allowed": False,
"reason": f"Max Drawdown Limit Hit ({current_drawdown_pct:.1%}). Trading HALTED for Buys."
}
# Daily Loss Limit (5%)
# If we lost 5% today, stop trading.
# daily_loss_pct is usually negative (e.g. -0.05)
if daily_loss_pct <= -0.05 and side.lower() == 'buy':
return {
"allowed": False,
"reason": f"Daily Loss Limit Hit ({daily_loss_pct:.1%}). Trading HALTED for Buys."
}
# Rule 1: Position Sizing
# Max 5% of portfolio per trade
max_alloc_pct = 0.05
if portfolio_value > 0:
trade_pct = amount_usd / portfolio_value
if trade_pct > max_alloc_pct:
return {
"allowed": False,
"reason": f"Position size too large ({trade_pct:.1%}). Max allowed is {max_alloc_pct:.0%}."
}
# Rule 2: "Don't Catch Falling Knives"
# If sentiment is very bearish (< -0.5) and trying to Buy
if side.lower() == 'buy' and sentiment_score < -0.5:
return {
"allowed": False,
"reason": "Guardian blocked BUY due to Extreme Bearish sentiment (Falling Knife protection)."
}
# Rule 3: Price Collar (Fat-finger protection - SEC Rule 15c3-5)
if last_close_price and price:
deviation = abs(price - last_close_price) / last_close_price
if deviation > 0.05: # 5% collar
return {
"allowed": False,
"reason": f"Price collar violation: {deviation:.2%} deviation from last close exceeds 5% limit."
}
# Rule 4: PDT (Pattern Day Trader) Check
if day_trades_count >= 3 and portfolio_value < 25000:
return {
"allowed": False,
"reason": "Pattern Day Trader protection: >3 day trades in account under $25k."
}
# Rule 5: Large Trade Confirmation
# Any trade > $5000 requires manual approval even if allowed by logic
needs_confirmation = False
if amount_usd > 5000.0:
needs_confirmation = True
return {
"allowed": True,
"needs_confirmation": needs_confirmation,
"reason": "Trade looks safe but requires manual confirmation." if needs_confirmation else "Trade looks safe."
}
