---
title: "Set up a risk condition"
description: "Set up a risk condition from a strategy's Risk card: choose a signal, set the thresholds in the rule's sentence, pick the Risk-Off method and run again."
canonical_url: "https://fincanva.com/docs/strategies/set-up-a-risk-condition"
last_updated: "2026-10-06"
md_url: "https://fincanva.com/docs/strategies/set-up-a-risk-condition.md"
---

# Set up a risk condition

A [risk condition](/glossary/risk-condition) is a market rule that switches your [strategy](/glossary/strategy) to **Risk-Off** when it triggers and back to **Risk-On** when it clears; you add it on the **Risk** card.

A strategy's Risk card reads as a rule: under When, its conditions, joined by Or so that either one is enough; under Then, Risk-Off and the allocation it switches to, with Edit allocation to change it.

## Steps

1. **Open the Risk card and add a condition.** On [the strategy's **Settings**](/docs/strategies/edit-a-strategy-s-settings), find the **Risk** card — if it isn't shown yet, select **Risk** beside **Add** — and select **Add condition**. The condition builder opens: "Configure a market condition that flips this strategy to its Risk-Off allocation."

   The Risk card with no condition yet: under When, the full-width Add condition key; under Then, Risk-Off, which switches on when a condition fires.
2. **Choose the signal.** Pick what the rule watches from the **Signal** menu. A template such as **VIX** fills the whole rule in; **Single series** and **Double series**, under **Custom**, start blank — see [Which signals can a condition watch?](#which-signals-can-a-condition-watch)

   
3. **Set the thresholds.** The builder writes the rule as sentences, and every underlined value opens its own control. On a **Single series** rule set both halves: the **Risk-Off** comparison that switches the strategy out and the **Risk-On** comparison that brings it back. Keeping the two apart stops a series that hovers around one level from flipping the strategy again and again ([whipsaw](/glossary/whipsaw)). The last sentence holds the **Confirmation delay (weeks)** and **Auto-rebalance**. Select **Save condition**, or **Cancel** to close without saving.

   The condition builder with the VIX template: the Signal menu reads VIX, the template's description sits under it, and the rule is written as sentences — go Risk-Off when the value of the CBOE Volatility Index is above 25, back to Risk-On when it is below 20, and when the rule flips, switch immediately without rebalancing.
4. **Choose how the strategy invests in Risk-Off.** On the **Allocation** card, the **Risk-Off** key now carries a red mark and **In Risk-Off:** reads **Setup required**. Select **Risk-Off**, then **Choose a method**, and pick the method the strategy uses while it is in Risk-Off. Until you do, the [backtest](/glossary/backtest) cannot run. Risk-Off profiles commonly hold a lower [invested portion](/glossary/invested-portion#how-does-fincanva-handle-it).

   The Allocation card open on Risk-Off with no method yet: Choose a method, marked as required, beside Required: risk conditions are active; under it, the Risk-On method.
5. **Save and run it again.** Select **Save** in the header; the same button then reads **Backtest** — select it. Until the new run finishes, the previous result stays on screen as **Needs re-run**.

   The Needs re-run chip: the result on screen is the previous run, dimmed, because a setting changed or a new market day arrived since it was computed.

**Done.** The **Risk** card reads your rule under **When**, with edit and remove actions beside it, and the new backtest switches between [Risk-On and Risk-Off](/glossary/risk-on-and-risk-off) each time it triggers; the **Regime timeline** on **Performance Metrics** shows when the strategy was in each.

## Which signals can a condition watch?

The **Signal** menu groups its templates under **Volatility**, **Yield curve**, **Inflation** and **S&P 500**; each fills the rule in for you. Under **Custom**, **Single series** reads one [instrument](/glossary/instrument)'s indicator against two thresholds, and **Double series** compares two series directly, with no thresholds. The **Quantitative regimes** group lists [Hidden regimes (Markov)](/glossary/hidden-regimes-markov), [Clustering](/glossary/clustering) and, on a [Combined](/glossary/combined), [Strategy's own performance](/glossary/strategy-s-own-performance): rules that decide from a model, with their own settings in place of the indicator, operator and thresholds.

The template's description appears under the menu, with " (modified)" after it once you change what it set; the reset button beside the menu puts it back as it ships.

In a series rule, the instrument opens the instrument search, and the measure ("value", "200-day moving average") opens the **Indicator** — **Raw price**, **Simple moving average**, **Percent change** or **Average momentum** — with a **Period** field when the indicator reads over a window. Each comparison opens its operator; each number opens its field. For the five rule shapes side by side, see [Condition types](/glossary/condition-types).

## What do Confirmation delay and Auto-rebalance do?

They are the two values of the last sentence, "When the rule flips, switch immediately without rebalancing." The **Confirmation delay (weeks)** — "0 = act immediately.", from 0 to 12 weeks — waits that many weeks of confirmation before the strategy switches. **Auto-rebalance** — "Trigger a rebalance when the condition flips." — makes a flip trigger an extra [rebalance](/glossary/rebalance) right away instead of waiting for the next scheduled one. How a flip reaches your holdings: [Auto-rebalance on flip](/glossary/auto-rebalance-on-flip); the trade-off each setting makes: [When risk management changes a strategy](/docs/strategies/tune-how-a-risk-condition-reacts).

## Can a strategy have two conditions?

Yes. Once the first is saved, select **Add second condition** on the **Risk** card and build it the same way. The card joins the two with a divider reading "Or": either one firing is enough to switch the strategy to Risk-Off.

A risk condition acts on the whole strategy. [Take profit](/glossary/take-profit) and [stop loss](/glossary/stop-loss) act on one position at a time, and they are separate rules on **Position exits** — see [Position exits](/docs/strategies/set-up-position-exits).

## Which values does each indicator accept?

| Indicator | Period | Thresholds |
|---|---|---|
| **Raw price** | — | from −1,000 to 1,000 |
| **Simple moving average** | 22, 60, 200 or 252 days | from −1,000 to 1,000 |
| **Percent change** | 1, 3, 6 or 12 months | from −1,000% to 1,000% |
| **Average momentum** | — | from −1,000% to 1,000% |

The **Confirmation delay (weeks)** takes a whole number from 0 to 12: 0 acts immediately, 12 waits three months of confirmation before the strategy switches. A value out of its range turns red with a message naming the range — "Confirmation delay must be between 0 and 12 weeks.", for example — and **Save condition** stays unavailable until you correct it. An empty **Period** — of a [moving average](/glossary/simple-moving-average-sma) or a [percent change](/glossary/percent-change) — reads "Enter a value."; an empty instrument reads "choose an instrument", with "Pick an instrument." under it. The **Quantitative regimes** rules have their own settings and ranges, on their own pages.

Fincanva is for education and illustration only. It is not personalised financial advice, and past or simulated results do not predict future ones. [Read the Terms Addendum](https://fincanva.com/terms/addendum#section-3)