01

What you are doing

You are evaluating what can go wrong even when automation behaves exactly as designed.

02

Why it matters

A strategy can be profitable over one period and lose in another. Leverage, sustained trends, gaps, liquidity, fees, funding and exchange failures can materially change outcomes.

03

Before you start

Only use capital you can afford to expose to derivatives risk. Understand that unrealized loss is economically real even before a position closes.

04

Step by step

  1. 01Inspect maximum drawdown, not only ending return.
  2. 02Inspect liquidation distance and how it changes after each DCA.
  3. 03Confirm commissions, funding and executable price rules are included.
  4. 04Check how long cycles remain underwater and whether capital becomes unavailable.
  5. 05Consider exchange/API outages and protection-order failure.
  6. 06Keep the full required collateral on the dedicated subaccount while positions are open.
05

What you should see

Results should state the period, starting capital, fees, funding, drawdown, cycles and liquidations. Claims must distinguish historical replay from live performance.

06

Security check

Risk control begins with account isolation and minimum API permissions; it does not end there.

07

Common problems

Reducing reserve capital during drawdown

This can increase margin pressure at the worst time.

Assuming 0 historical liquidations means liquidation-proof

It does not. Future paths and exchange conditions can differ.

Ignoring funding and commissions

High turnover can turn a theoretical edge into a weak or negative result.

08

Next step

Create and secure a dedicated Bybit account environment.