Risk Flags are warnings that highlight potential dangers in the current market conditions. They help you avoid common mistakes and protect your capital by alerting you to situations that historically lead to losses.
Common Risk Flags
LenQuant detects several types of risk conditions:
- High Volatility: ATR is significantly above average, increasing risk of stop-outs
- Overextended: Price has moved too far too fast, likely to retrace
- Approaching Resistance: Price near major resistance level
- Approaching Support: Price near major support level
- Low Volume: Insufficient volume to confirm the move
- Divergence: Price and momentum indicators disagreeing
- Choppy Conditions: Market showing erratic behavior
- News Event: Scheduled economic event may cause volatility
How Flags Affect Scores
Each risk flag reduces your trade score and can lower your grade:
- Minor flags: -5 points each
- Moderate flags: -10 points each
- Severe flags: -15 to -20 points each
- Multiple flags compound, making the setup progressively riskier
Responding to Risk Flags
When you see risk flags, consider these adjustments:
- Reduce position size: Trade smaller to limit potential loss
- Widen stop loss: Give more room to avoid stop-hunting
- Skip the trade: Wait for conditions to improve
- Use the lower leverage band: Stay conservative on leverage
💡 Pro Tips
- •No flags (green checkmark) means conditions are favorable
- •One or two minor flags is normal—no setup is perfect
- •Multiple flags or severe flags warrant serious caution
- •Flags change in real-time as conditions evolve
