Falcon AI includes a suite of built-in risk management tools that calculate ATR-based stop-loss and take-profit levels, position sizing, and trailing stops automatically for every signal generated.
Falcon AI uses Average True Range (ATR) to size stop-loss and take-profit levels dynamically to current market volatility. Instead of fixed ticks or rigid R:R ratios, every signal's SL and TP are calculated from a rolling ATR window, so risk scales with how the market is actually moving in real time. A built-in fixed-point fallback covers low-volatility regimes where the ATR-derived distance would be too tight.
The SL zone renders as a red shaded band on the TradingView chart, and the TP target as a green shaded band. Once price moves in your favor, the trailing stop tightens at 0.3 × ATR behind price to protect open profit while still giving the trade room to breathe through normal volatility. Default settings can be tuned in the indicator's input panel under Risk Management → ATR-Based SL/TP.
Falcon AI displays a suggested position size for each signal based on the configured account size and maximum risk percentage per trade. The calculation uses the distance from entry to stop-loss and the tick value of the traded contract.
The standard position sizing formula applied is:
Example calculation for a Micro E-mini Nasdaq (MNQ) signal:
| Variable | Value |
|---|---|
| Account Size | $25,000 |
| Risk Per Trade | 1% ($250) |
| Contract | MNQ (Micro E-mini Nasdaq) |
| MNQ Tick Size | 0.25 index points |
| MNQ Tick Value | $0.50 per tick |
| Entry Price | 19,850.00 |
| Stop-Loss Price | 19,800.00 |
| Stop Distance | 50 points = 200 ticks |
| Risk Per Contract | 200 ticks × $0.50 = $100 |
| Suggested Position Size | $250 ÷ $100 = 2 contracts |
Default risk settings in the Falcon AI indicator are set to 1% per trade. This can be adjusted in the indicator settings panel. We strongly recommend never risking more than 2% of account capital on a single signal, regardless of the confidence score.
