Episode 10: 💥 Stop Going All-In and Getting Liquidated! Master Freqtrade's Capital Allocation to Survive Longer

In Freqtrade, capital allocation is the foundation of all strategy operations. Whether in spot or futures trading, parameters like stake_currency, stake_amount, and tradable_balance_ratio determine the currency used per trade, the amount of funds, and how account risk is controlled.

Proper configuration ensures stable and safe strategy execution; poor setup can lead to order failures or liquidation, impacting live trading.

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🪙 stake_currency — The Trading Currency Used

"stake_currency": "USDT"

• Specifies the base currency used for buying in each trade.
• Common options: "USDT", "BTC", "ETH", etc.
• In spot trading, this determines the asset type you need to prepare in your account.
• In futures mode, it also determines the pricing unit for contract margins. ✅ Practical Advice:
• Most strategies use "USDT" as stake_currency—it's more universal and stable.
• If you only hold BTC and want to trade other coins directly with BTC, switch to "BTC".

💵 stake_amount — Investment Amount per Trade

Can be set as:

1️⃣ Fixed Value (Recommended for Beginners)

"stake_amount": 100

• Each trade uses up to 100 USDT; actual order amounts may vary slightly due to price/position adjustments.
• Easier risk control with higher consistency between backtesting and live results.

2️⃣ Dynamic Value "unlimited"

"stake_amount": "unlimited"

• The system automatically uses available account balance (limited by tradable_balance_ratio below).
• More flexible, suitable for larger funds or complex strategy scheduling. ⚠️ Note:
• For futures accounts, ensure reasonable leverage is set on the exchange—Freqtrade's stake_amount does not automatically control leverage.
• When using multi-pair or multi-position strategies, pay special attention to position management to avoid depleting account balance.

🧮 tradable_balance_ratio — Balance Usage Ratio Limit

"tradable_balance_ratio": 0.95

• Only effective when stake_amount: "unlimited".
• Means at most 95% of account balance is used for opening positions, reserving 5% as buffer.
• Primary role: Prevent "using up balance" to avoid subsequent signal order failures.
• 📌 Example:
  • Account balance 1000 USDT, ratio = 0.95 → Strategy uses at most 950 USDT for positions.
• ✅ Recommended Values:
  • Generally set to 0.90 ~ 0.98;
  • The more conservative, the better it prevents liquidation or insufficient margin.

🛡️ Live Trading Risk Control Recommendations

Control Point	Suggested Configuration	Reason
Initial Testing	"stake_amount": 50~100	Fixed amounts are more stable, easier to observe strategy performance
Batch Trading	Pair with "max_open_trades" to limit positions	Prevent too many simultaneous positions, fund dispersion, and risk out of control
Account Safety	Set tradable_balance_ratio < 1.0	Reserve buffer balance to prevent liquidation or insufficient fees
Leverage Mode	Dynamically control positions or enable liquidation_buffer	Prevent full-margin leverage liquidation and liquidity crashes

✅ Example Configuration Combination

"stake_currency": "USDT",
"stake_amount": "unlimited",
"tradable_balance_ratio": 0.9,

This configuration means:

• Trade using USDT;
• No fixed amount per order, but not exceeding 90% of total balance;
• Skip orders below 10 USDT;
• More suitable for intermediate/advanced users with flexible risk control strategies.

✅ Summary Checklist

Parameter Name	Description	Recommended Value / Advice
stake_currency	Currency used for trading (buying)	"USDT" most common
stake_amount	Amount per trade: fixed or "unlimited"	Beginners use fixed value; experts use dynamic
tradable_balance_ratio	Limits max account usage ratio to avoid full positions or depleting margin	0.9 ~ 0.98

Use these configurations as your basic capital safety line before going live. No matter how good the strategy, always guard the "bottom line" of capital control.