[RISK] R1 — Default leverage 100x will cause instant liquidation

[cluster2600]

Summary

Default leverage is configured at 100x in config/config.py:56, with max at 125x. This is catastrophically dangerous for live trading.

Risk

EXTREME — At 100x leverage with $1,000 capital:

• A 1% BTC price move = 100% loss (liquidation)
• BTC regularly moves 3-5% in minutes
• This configuration WILL liquidate the account on first significant move

Location

# config/config.py:54-56
MAX_LEVERAGE = 125
DEFAULT_LEVERAGE = 100
MAX_LOSS_PER_TRADE = 50  # USD — meaningless at 100x

Fix

For paper trading validation:

DEFAULT_LEVERAGE = 1   # No leverage during testing
MAX_LEVERAGE = 5       # Max 5x even in production

For cautious live trading (after validation):

DEFAULT_LEVERAGE = 3
MAX_LEVERAGE = 5

Acceptance Criteria

• Default leverage ≤ 3x
• Max leverage ≤ 10x
• Leverage configurable per strategy
• Warning logged when leverage > 5x

Sprint

Sprint 1 — Story 1.2 (Security Hardening) + Sprint 2 — Risk Management

Found by PM agent audit — Feb 17, 2026

[cluster2600]

Fixed in sprint2/reliability-risk (2f32948) — Default leverage reduced from 100x to 3x with startup safety validation. Validated in sprint3/paper-trading.