An automated system will, eventually, do something you didn’t intend, a bad parameter, a data glitch, a logic error at the wrong moment. A kill switch is how you stop the bleeding when that happens. If you’re going live without one, you’re not ready.
What a kill switch actually is
“Kill switch” covers a few different things. It helps to separate them:
- A manual stop. A control you can hit to halt a running strategy immediately. The simplest and most important one.
- Loss-based halts. Logic that stops trading when losses cross a threshold for the day or the run.
- Error-based halts. Logic that stops the strategy when it hits repeated errors, rejections, or impossible state.
- Exposure limits. Logic that refuses to add risk beyond a cap.
The first is infrastructure, something the platform or your runtime gives you. The rest are risk controls you design into the strategy or the system around it. Don’t assume “kill switch” means all of them.
Design principles
- Make the manual stop reachable. In a bad moment you want one obvious control, not a hunt through menus. Know how to stop a run before you need to.
- Fail toward stopping. When the system is confused, state it can’t reconcile, errors it can’t handle, the safe default is to halt, not to keep trading.
- Decide what “stopped” means for open positions. Halting new orders is not the same as flattening. Be explicit about whether stopping closes positions or just stops acting, and know who’s responsible for what’s left open.
- Log the trigger. When a halt fires, record why. You’ll want to know whether it was a loss limit, an error, or your hand on the switch.
What to wire up before going live
- A way to stop a run immediately, that you’ve actually tested.
- Clear rules for what happens to open positions when you stop.
- Any loss or exposure limits your strategy should enforce itself.
- Logging of every halt and its cause.
- A plan for who watches and who acts when something goes wrong.
How Periscøpe fits
Periscøpe gives every run a Kill control that requests the run stop, checked on every step of the run loop, your reliable manual stop. Beyond that manual kill, think of loss limits, exposure caps, and error-based halts as risk logic you build into your strategy, since those are specific to how you trade. And remember that in live, your broker is the source of truth: stopping a Periscøpe run halts the strategy, but you remain responsible for any positions open at your broker.