TL;DR
A $3,500 holding is 35% of a $10,000 account. Reducing it to a proposed 25% cap requires selling $1,000, or 28.57% of that holding, before execution effects. A concentration cap is not a portfolio drawdown ceiling. The recorded dividend example's 22.41% daily peak-to-trough decline needs a 28.87% recovery. Compare risk indicators using their actual denominators, matched dates and costs before treating a guard as an improvement.
Follow a real portfolio from its peak to its trough
Portfolio value (USD)
- Five dividend growers 2026-10-07
- $14,479.88
- SPY buy and hold 2026-10-07
- $13,399.03
Five dividend growers: 22.41% largest decline in plotted observations. 2025-02-13 ($10,415.39) to 2025-04-08 ($8,081.82).
- Observed daily decline
- 22.41%
- Gain needed to regain this peak
- 28.87%
The five-dividend-growers simulation returned 44.80% overall. Within that positive result, stored daily equity fell from $10,415.39 on 2025-02-13 to $8,081.82 on 2025-04-08: 22.41% of the peak.
Recovery from that trough requires ($10,415.39 ÷ $8,081.82 − 1) × 100 = 28.87%. Over the same two dates, stored SPY equity changed -18.57%. These are matched dates, rather than independently selected favorable peaks for each line.
Each simulation starts with $10,000 and uses fractional shares and reinvested dividends. Candidate trades pay 0.1%; the stored SPY baseline pays no candidate commissions. The engine's reported drawdown can include observations between the daily closes shown here.
Decide what a risk limit is meant to change
A 25% position cap controls one holding's marked value; it does not impose a 25% portfolio drawdown ceiling. Before testing a cap, declare its allocation basis, comparison and rebalance action. Compare the unchanged portfolio with the capped version over the same dates and inspect the resulting exposure, fees and missed recoveries. The record above establishes the original path, not an unrun capped variant.
Follow the concentration calculation
Read the whole account as the denominator
The illustrative account contains $10,000 in cash and holdings. One $3,500 holding occupies 35% of that account. A proposed 25% cap would allow $2,500 at these marks.
The colored segment is the holding’s share of the whole account. The dashed line marks the proposed cap, and the red segment is the $1,000 excess.
Check which percentage the order uses
The excess is 10% of the $10,000 account, but 28.57% of the $3,500 holding. An order to sell 10% of this holding would sell $350 at these marks, leaving $3,150.
- Amount above the proposed cap
- $1,000
- Share of the current holding
- 28.57%
Keep total account value, holding value and buying power separate. Fees, price movement and share rounding can change the executable amount.
Check the sizing in Aurora
Open the prepared request in Aurora. It includes the example’s actual inputs, so you can ask about the part you want to check.
Review the explanation against the evidence on this page. Account changes and research jobs require a separate decision.
How much of the account is in one holding?
Read how much of the account is in one holding?
For an illustrative $10,000 account with $3,500 in one holding, Position Value divided by Portfolio Value is 35%. A proposed 25% cap permits $2,500 in that holding at these marks. Reducing $1,000 would remove 28.57% of the position's current value. Fees, price movement and share rounding can change the executable amount.
This calculation describes concentration at a point in time. It does not prove a 25% cap is optimal or protect against correlated holdings. Check total exposure, cash and related positions, then review the exact order sizing before using a portfolio rule.
Scroll sideways to compare all columns. Select a heading to sort.
| Portfolio | $10,000 | Cash plus holdings. |
| One holding | $3,500 | 35% of the portfolio. |
| Proposed 25% cap | $2,500 | This is an illustrative requirement. |
| Excess above the cap | $1,000 | 28.57% of the holding’s marked value. |
No matching rows. Clear the filter to see all records.
portfolio_value = 10_000
position_value = 3_500
proposed_cap = 0.25
assert portfolio_value > 0 and 0 <= proposed_cap <= 1
exposure_pct = 100 * position_value / portfolio_value
excess_value = max(0, position_value - proposed_cap * portfolio_value)
trim_pct = 100 * excess_value / position_value if position_value > 0 else 0
print(f'Exposure: {exposure_pct:.2f}%; excess: ${excess_value:,.2f}; trim: {trim_pct:.2f}%')
# Exposure: 35.00%; excess: $1,000.00; trim: 28.57%What portfolio and position controls showed in the archive
Tick: recorded median Sharpe. Shaded whisker: recorded middle 50% of Sharpe, not a confidence interval. Counts are distinct execution contracts.
Inspect the archive association and its scope
Scroll sideways to compare all columns. Select a heading to sort.
| Portfolio Value | 1274 | 0.895 | 0.563 to 1.111 |
| Position Value | 10670 | 0.702 | 0.113 to 1.100 |
No matching rows. Clear the filter to see all records.
Portfolio Value measures cash plus holdings. Position Value measures selected holdings. They can make allocation and holding guards explicit, which is different from predicting the next price move. The table describes whole strategies containing each control; it does not isolate the control's effect.
The same strategy can contain both controls. Assets, settings and periods differ, and the archive lacks complete exposure and closed-trade counts. A higher median here does not establish a universally best risk indicator or a controlled improvement from adding a guard.
Inspect state controls in a saved strategy
Read inspect state controls in a saved strategy
Open a library recipe and inspect its actual saved indicators, conditions and actions. Identify the selected assets for each Position Value operand. Read Portfolio Value alongside buying power; a cash balance and the total account value answer different sizing questions.
Before testing a guard, write down its intended behavior: an empty-holding entry requires zero selected position value; an exit requires a positive holding. Check the comparison, selected assets and allocation basis in the complete rule. A familiar name or a high backtest score does not establish that those fields are correct.
Worked drawdown recovery calculation
Read worked drawdown recovery calculation
This deterministic example explains the denominator. A 100% loss leaves zero equity and has no finite recovery percentage without new capital. Deposits can change account value without representing investment return.
Example only: equity peak = $10,000; trough = $8,000
Drawdown = ($10,000 - $8,000) / $10,000 = 20%
Recovery needed = ($10,000 / $8,000 - 1) = 25%
A further 20% gain reaches $9,600, not the previous peak.Read each indicator with its denominator
Read read each indicator with its denominator
Scroll sideways to compare all columns. Select a heading to sort.
| Sharpe | Return series, risk-free rate, observation frequency and annualization | A probability of profit or a forecast |
| Sortino | Downside return definition and sample size | Protection against an unobserved tail loss |
| Ulcer index | Depth and duration of drawdowns from equity peaks | All liquidity or broker execution risk |
| Closed-trade count | Completed positions underlying win rate and profit factor | Independent observations for every price row |
| Exposure and concentration | Capital deployed, holdings and common underlying risk | Diversification from strategy labels alone |
| Fees and turnover | Modeled costs, order sizes and traded notional | Actual broker fills or market impact |
No matching rows. Clear the filter to see all records.
Compare matched windows before ranking books
Read compare matched windows before ranking books
Use the same capital, fees, interval, date boundaries and dividend treatment for the candidate and baseline. Do not compare a daily equity statistic with an intraday trade statistic without reconciling their construction. Keep missing/nonfinite results visible rather than replacing them with a favorable score.
Turn indicators into a review decision
Read turn indicators into a review decision
Write risk and activity requirements before selecting candidates. Then inspect each fold, warning and path against those requirements. A portfolio that fails the requirement is still useful research evidence, but a best-available fallback does not automatically pass. Follow a frozen design with paper observation of fills, positions and cadence before drawing operational conclusions.
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