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When your Halyrd agent breaches a drawdown rule while trading live, it doesn’t crash or freeze — it demotes itself back to paper mode, keeps trading, and tells you exactly what happened. What you need to do next depends on which rule fired. This guide covers both demotion scenarios, what the agent does during each one, and the steps to get back to live trading after a max-drawdown breach.

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Two demotion scenarios

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Daily drawdown breach

The daily drawdown limit is a per-UTC-day risk leash. If the agent’s losses within a single calendar day (UTC) exceed this threshold, live trading locks until midnight UTC resets the clock. What happens:
  • The agent flattens its live position to USDT immediately
  • Live trading is paused for the rest of the current UTC day
  • The agent keeps running its full loop in paper mode during the lockout — every trade is simulated, journaled, and tagged PAPER
  • The evaluation track record continues accumulating without interruption
What you see in the dashboard:
  • The status badge changes to DEMOTED (amber) with a PAPER sub-pill
  • The badge reads: “Paper-trading — live paused, daily drawdown breached”
  • A demotion marker appears on the equity chart
  • The journal logs the breach event with the exact rule name and the drawdown figure at the time of breach
What you need to do: Nothing. Live trading resumes automatically at the next UTC midnight. The agent manages the lockout entirely on its own.

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Max drawdown breach

The max drawdown limit is the hard ceiling — the absolute worst-case loss the agent is permitted to accumulate from its peak equity. A breach here is a more significant event that requires your review before live trading resumes. What happens:
  • The agent flattens its live position to USDT immediately
  • Live trading is paused indefinitely — there is no automatic recovery
  • The agent keeps running in paper mode, journaling every trade and continuing to track evaluation metrics
  • The journal logs the breach with the exact rule name and drawdown figure
What you see in the dashboard:
  • The status badge changes to DEMOTED (amber) with a PAPER sub-pill
  • The badge reads: “Paper-trading — live paused, max drawdown breached”
  • A demotion marker appears on the equity chart at the point of breach
  • Live trading does not resume until you manually re-approve the agent in Settings
A daily-breach demotion resolves itself automatically at the next UTC midnight — no action required on your part. Only a max-drawdown breach requires you to review the agent’s paper performance and manually re-approve it before live trading can resume.

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What to do after a max-drawdown breach

Before re-approving the agent for live trading, take the time to understand what caused the breach and whether the agent’s current strategy is ready to run with real capital again.
1
Review the breach entry in the journal
2
Navigate to Journal (/journal) and find the demotion entry. It names the exact rule that fired — for example, “Max drawdown breached: equity fell 20.4% from peak, exceeding the 20% ceiling” — along with a timestamp and the sequence of trades that led to the breach.
3
Read the journal entries in the period immediately before the breach. Look for patterns: Was the agent trading into a sustained trend? Did the streak circuit-breaker fire first? Were multiple losses concentrated in a short window?
4
Review the equity curve and trade history
5
Go to the Dashboard (/) and look at the equity curve around the demotion marker. Then open Trades (/trades) and filter for the live phase.
6
Ask yourself:
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  • Did the drawdown happen quickly or accumulate over many trades?
  • Did the agent’s exits follow the strategy logic, or did something unexpected happen?
  • How does the drawdown from peak compare to the daily drawdown limit — did the agent hit the daily cap repeatedly before hitting the max?
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    Consider adjusting the strategy
    9
    If the breach reveals a flaw in the current strategy or evaluation config — parameters that are too aggressive for current market conditions, a band width that doesn’t suit the asset, an RSI threshold that generated bad entries — navigate to Strategy Builder (/research) or Config (/config) to create a new strategy version with adjusted parameters.
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    A new strategy version starts with a fresh evaluation window and its own track record. The version history in /config keeps the full audit trail of every version tried and retired, so the selection-by-evidence record is always intact.
    11
    Monitor paper performance
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    Before re-approving for live, watch the agent run in paper mode under the revised strategy. Check that the equity curve is trending positively, that drawdown headroom is healthy, and that the journal shows the agent making selective, fee-positive trade decisions.
    13
    There is no required minimum paper period after a max-breach demotion — how long you observe is your call. The evaluation metrics and journal are your evidence.
    14
    Re-approve for live trading
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    When you’re satisfied with the paper performance, go to Settings (/settings) and click Re-approve for live trading. A confirmation modal appears. Review the summary of the paper period since demotion, then confirm.
    16
    The agent switches back to live execution. The status badge updates to LIVE (solid green), and a new promotion marker appears on the equity chart at the re-approval point.

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    What the agent does during any demotion

    Regardless of which rule fired, the agent never goes idle during a demotion period:
    • Paper-trading continues — the loop runs on the same schedule, pulling live market data and simulating fills at real BSC prices
    • Journaling continues — every trade and skip is logged with a plain-English explanation, and paper entries are tagged so they’re never confused with live history
    • Evaluation metrics continue accumulating — win rate, expectancy, drawdown from peak, and trade count all update in real time
    • The equity chart updates — hourly snapshots keep flowing; the chart distinguishes paper and live phases with phase shading
    The demotion is visible and intentional, not silent. The dashboard banner and status badge make the reason explicit so you always know what state the agent is in and why.
    If you want to stop all trading activity immediately — paper and live — rather than waiting for a demotion to resolve, use the kill switch. It revokes the TWAK signing session instantly and can be activated from Settings at any time. See the Kill Switch guide for details.