Ratchet Stop: Automatic Position Protection
Updated Aug 13, 2026 · 2 min read
How Ratchet Stop handles exits on the positions Senpi manages for you: the two phases, what it does not cover, and the limits of any stop.
Ratchet Stop is how Senpi handles exits on the positions it manages for you. Where it runs, it is on by default and a strategy cannot switch it off. It does not cover everything you hold, so check the coverage list before you rely on it.
Two phases
- Loss floor
- A covered position opens with a floor underneath it. If price breaks that floor, Ratchet Stop moves to close the position rather than let it keep running against you.
- Profit lock
- Once a position is far enough into profit, the floor follows it up. By design the floor steps up as the position gains and does not step back down, so a winner can keep running with more of the gain sitting above the exit level. Where the floor sits is not the same as where an exit fills - see the limits below.
Why a strategy cannot turn it off
Your strategy decides what to trade and when to enter. Ratchet Stop decides when to exit, and it runs outside your strategy's own logic, so a bug in a strategy cannot switch off its own stop.
What Ratchet Stop covers
Coverage follows who opened the position, not what the position is.
- Covered: positions opened by a strategy you deployed, other than a mirror strategy.
- Not covered: positions you open yourself, whether you place the trade in the app or ask your agent for a one-off trade outside a strategy. You manage those exits.
- Not covered: positions opened by a mirror strategy, which follows another trader's trades. A mirror is a strategy, but Ratchet Stop does not run on it.
Know which is which
Check that list before you assume a position is being watched. Anything you opened yourself, and anything a mirror strategy opened, needs you to manage the exit.
What a stop does not do
Stops are best effort. In a fast move or thin liquidity a stop can fill below its trigger. Ratchet Stop limits how far a position can run against you. It does not guarantee a maximum loss. Senpi's Terms set this out in full.
Who does what
| Decision | Who makes it |
|---|---|
| What to trade, and when to enter | Your strategy |
| When to exit a position it covers | Ratchet Stop |
| Exits on everything else you hold | You |
Ask your agent to check the stops on your open positions and it will tell you what it found.
Key takeaways
- Ratchet Stop is on by default wherever it runs, and a strategy cannot switch it off.
- Positions you open yourself, and positions opened by a mirror strategy, are not covered. You manage those exits.
- It limits how far a position can run against you. It does not guarantee a maximum loss.