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Exceeding the Allowed Risk per Asset: What It Means and How to Avoid It
At Xiomex, the maximum risk per asset rule is one of the pillars of our capital management. Its goal is to protect allocated capital and maintain a safe trading environment for both the trader and the firm.
What does the rule mean?
You cannot expose more than 20% of your allocated capital on a single asset or highly correlated pair. This applies to the total value of your open trades, whether in a single entry or multiple combined.
Example:
In a $5,000 account with 1:10 leverage, your total market exposure is $50,000.
→ 20% of that amount is $10,000, which is your maximum limit per asset.
If you exceed that limit, your account will breach the rule and the exam will be marked as failed automatically.
Why does this rule exist? The “Gap” risk
A gap is a sharp difference between an asset’s closing and opening price, often caused by news or events outside market hours. If your exposure is too high, a gap can cause losses beyond protected capital, affecting both the firm’s stability and your account.
How to avoid breaking this rule
Always calculate your lot size based on your capital and leverage.
Diversify your trades across different assets.
Review your KPIs and rules before opening positions.
Following this rule is not only mandatory but also safeguards your trading from unnecessary risks.