Guardian Shield : A new automated Risk Management System by Blue Guardian

Date: June 13, 2024

In the world of trading, managing risks effectively is paramount to achieving consistent success. Recognizing this, Blue Guardian has introduced an innovative risk management tool called Guardian Shield. This new feature is set to revolutionize the way traders manage their accounts by providing automatic protection against significant losses.

Company Overview

Blue Guardian, legally known as Iconic Exchange FZCO, was established in 2019. Under the leadership of CEO Sean Bainton, the company has grown significantly, registering its presence in both the UK and Dubai. Blue Guardian is committed to providing advanced trading solutions and support to traders worldwide.

Previous Feature: Guardian Protector

Last year, Blue Guardian introduced Guardian Protector, a feature designed to automatically close trading positions if a trader's drawdown reached a certain percentage, as set by the trader. However, an analysis revealed that only 5% of traders utilized this feature. Interestingly, this small group of traders proved to be the most consistent and cautious, demonstrating exemplary risk management practices.

The Need for Enhanced Risk Management

Blue Guardian's analysis highlighted a critical need for improved risk management among traders. The data showed that over 73% of funded accounts breached their limits due to exceeding their maximum daily drawdown. Traders who quickly closed their losing positions while allowing winning positions to run performed better overall. This insight solidified Blue Guardian's decision to integrate a more comprehensive risk management tool into all funded accounts.

Introduction to Guardian Shield

Guardian Shield is the latest addition to Blue Guardian's suite of trading tools, designed to enforce stricter risk management protocols automatically. Unlike Guardian Protector, which required manual activation, Guardian Shield is integrated into all funded accounts by default, ensuring that every trader benefits from its protective measures.

How Guardian Shield Works

Guardian Shield operates under a straightforward principle: it automatically closes all trading positions when the total loss reaches a 2% threshold. Here's how it functions in different scenarios:

  • Scenario 1: If a single trade reaches a 2% loss, Guardian Shield will activate and close the position.
  • Scenario 2: If multiple trades collectively result in a 2% loss, Guardian Shield will close all the positions to prevent further losses.

Benefits of Guardian Shield

The implementation of Guardian Shield offers numerous benefits:

  • Improved Risk Management: Ensures that traders do not suffer excessive losses by enforcing a strict loss limit.
  • Enhanced Trader Performance: Encourages disciplined trading practices by automatically managing risk.
  • Consistency in Trading Outcomes: Helps traders maintain a steady performance by preventing significant drawdowns.

Impact on Funded Accounts

Guardian Shield has been seamlessly integrated into all Blue Guardian's funded accounts. This automatic feature is expected to significantly reduce the number of accounts breaching their drawdown limits, thereby promoting more sustainable trading practices and better overall performance.

Case Studies and Examples

To illustrate the effectiveness of Guardian Shield, let's look at two hypothetical traders:

  • Example 1: Trader A: This trader placed a single trade that unfortunately reached a 2% loss. Guardian Shield activated, closing the position and preventing further losses.
  • Example 2: Trader B: This trader had multiple trades open, which collectively reached a 2% loss. Guardian Shield stepped in, closing all trades to cap the loss at 2%.

Comparison with Other Risk Management Tool

When compared to Guardian Protector, Guardian Shield offers a more proactive approach to risk management by being automatically integrated into all accounts. Unlike Guardian Protector that requires manual activation or adjustments, Guardian Shield operates seamlessly in the background, providing continuous protection.

How to Maximize Guardian Shield's Potential

To get the most out of Guardian Shield, traders should:

  • Stay Informed: Regularly review their trading strategies and adjust them as needed to align with the 2% loss limit.
  • Be Disciplined: Adhere to sound risk management practices, knowing that Guardian Shield will handle the rest.
  • Monitor Performance: Use the data provided by Guardian Shield to analyze performance and make informed decisions.