All Market Conditions - Especially Important in Downturns
| Strategy Type | Risk Management / Capital Preservation |
| Market Outlook | All Market Conditions - Especially Important in Downturns |
| Risk Level | Risk Reduction Tool |
| Time Horizon | Continuous Monitoring |
| Best Conditions | Essential during volatile markets and extended drawdowns |
| Avoid When | Never - drawdown protection should always be active |
| Volatility | Nifty 50 average annual volatility 18-22% |
| Historical Drawdowns | 2008: -60%, 2020: -38%, 2022: -18% |
| Recovery Times | Major drawdowns typically recover in 12-24 months |
| Circuit Breakers | 10%, 15%, 20% market-wide circuits on Nifty/Sensex |
| Intraday Limits | MIS positions auto-squared at 3:15-3:25 PM |
| Margin Calls | Broker can liquidate if margin breached |
| Mtm Settlement | Daily MTM for F&O can trigger margin requirements |
| Volatility Margins | Exchange increases margins during high volatility |
| Sebi Risk Management | Brokers required to have risk management systems |
| Peak Margin Rules | Intraday peak margin reporting mandatory |
| Client Fund Segregation | Client funds must be segregated |
| India Vix | Fear gauge - elevated >20 signals caution, >30 extreme fear |
| Fii Outflows | Sustained FII selling indicates potential extended drawdown |
| Advance Decline | Broad market weakness when A/D ratio persistently negative |
| Put Call Ratio | PCR >1.2 indicates fear, <0.7 indicates complacency |
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