> ## Documentation Index > Fetch the complete documentation index at: https://uncoded.ch/docs/llms.txt > Use this file to discover all available pages before exploring further. # Reserves — The 50% Rule > Why you keep approximately 50% of your total exchange balance as reserve, not deployed to active modes. The buffer that absorbs drawdowns and provides operational flexibility. **The 50% reserve rule: of your total exchange balance, approximately 50% should be in active modes, 50% should be reserve.** Reserve capital is held in stable quote (USDT, USD, EUR) but not allocated to any active mode. It's the buffer that absorbs drawdowns and provides flexibility. ## Why a 50% reserve Active modes will have drawdowns. With reserve, a `-20%` drawdown on trading capital is `-10%` on total exchange balance. Without reserve, the same `-20%` drawdown is `-20%` on total. Half the felt impact. Reserve lets you add new pairs, switch modes, take advantage of opportunities, or absorb fees and operational costs without touching active positions. Knowing you have substantial dry powder makes drawdowns easier to hold through. Operators with reserves panic-close less frequently than fully-deployed operators. Reserve in USDT earns minimal yield (some venues pay small interest on idle USDT). The "opportunity cost" of holding reserve is small relative to the resilience it provides. ## What "reserve" actually means Reserve is USDT (or USD, EUR depending on your quote currency) sitting in your exchange's spot wallet. Not in any open position. Not earmarked to any mode. On most exchanges, the quote-asset balance is what the bot reads when computing "available capital" for a mode. Reserve is what's NOT included in any mode's allocation. The active modes have their per-mode capital configured. Mode 4 BasicMode might be configured for `$20,000` capital. The reserve is the additional `~$10,000` sitting in your account that's NOT in any mode's configuration. The bot does not touch reserve capital unless you explicitly allocate it to a mode. Reserve lives on the exchange — same place as your active capital. This means: * It's available immediately if you need to redirect to active modes. * It's subject to the same exchange-side risks (insolvency, hack) as active capital. * It's not "reserve from a banking-system perspective" — it's reserve from a trading-bot perspective. For exchange-level resilience, hold cold-wallet inventory separately. That's a different layer of risk management. The discipline that makes reserves work is treating them as untouchable for routine operation. Don't dip into reserve to "average down" on a bad position. Don't deploy reserve to add a new pair on a whim. Reserves come out for: emergencies (kill-switch-then-evaluate scenarios), planned scaling-up after sustained good results, deliberate operational changes (new venue, new mode introduction). ## Sizing examples * Trading capital: `$5,000` (LowMoney mode, perhaps). * Reserve: `$5,000`. The starter's reserve is `100%` of trading capital. Generous, but small absolute capital means flexibility matters more than precise ratios. * Trading capital: `$20,000` (BasicMode). * Reserve: `$10,000`. Classic 50/50 split. The recommended baseline. * Trading capital: `$25,000` (LongTimeLong). * Reserve: `$25,000`. Patient modes hold through deeper drawdowns. A larger reserve is appropriate. * Binance: `$25,000` total (`$17,000` trading, `$8,000` reserve). * Bybit: `$35,000` total (`$23,000` trading, `$12,000` reserve). Same `~50%` reserve discipline on both venues. Per-venue independence makes risk easier to track. ## When to deploy reserve to active modes After several months of stable performance and operational confidence, you might scale active capital up. Some of the reserve flows into active modes. Move slowly. `+25%` of active capital, then re-evaluate after another month. You want to add a third pair to your BasicMode setup. The new pair needs capital. Pull from reserve to fund the new pair, maintaining the `25%` per-pair rule. Watch the new pair for a month before scaling further. You're decommissioning Mode X and starting Mode Y. Capital flows through reserve as the rotation completes. The reserve "buffers" the operation so you're not racing to redeploy capital. ## When NOT to deploy reserve Position is `-15%` underwater. "I'll add reserve to lower my average entry." **Reality**: this is reaching for losses. If the position keeps falling, you've doubled your bad bet. **Fix**: stop-loss is the tool for managing bad positions. Reserve is not for averaging down. Some altcoin is rallying. "I'll deploy reserve to capture the move." **Reality**: reactive deployment based on recent price action is impulse trading. Don't. **Fix**: if you want to add a symbol, do it through a deliberate process — backtest, validate, allocate per the rules. `+10%` realized in month 2. "Let me scale up by `2x` next month." **Reality**: a good month doesn't predict the next month. Recency bias. **Fix**: scale `+25%` at most, after multiple consecutive good months. You withdrew `$5,000` for a personal expense. Now you want to "make up" the gap by deploying reserve. **Reality**: your total exchange balance is now smaller. The active capital should reflect that, with proportional reserve. **Fix**: shrink active capital proportionally, not deploy the reserve. ## What if I need to withdraw from reserve Life happens — taxes, medical, family. If you need cash out of crypto, the reserve is your first source. Process: 1. Plan ahead if possible — give yourself a few weeks for orderly withdrawal. 2. Withdraw from reserve first (since it's already in stable quote). 3. Reduce active capital allocations proportionally to maintain the `~50%` reserve ratio after withdrawal. 4. Avoid withdrawing during active positions if possible — let them close first. For operators with substantial realized P\&L, tax payments are a recurring liquidity need. Plan reserve to cover at least one quarter of estimated tax obligations. VPS rent, exchange fees (typically deducted from active trades), domain costs. These are typically paid from reserve. If you decide to exit unCoded entirely (whatever the reason), reserve withdraws first; active positions close out via their normal cycle (or you close them manually). The reserve makes "I'm done" execution faster — you have immediate liquidity available. ## Best practices * ✅ **Maintain `~50%` reserve as a default**, more if patient mode or stress-averse. * ✅ **Keep reserve in stable quote** (USDT, USD, EUR) — not deployed to active modes. * ✅ **Don't dip into reserve for routine operation** — only emergencies, planned scaling, deliberate changes. * ✅ **Don't average down with reserve** on losing positions. * ✅ **Same reserve discipline across venues** — per-venue 50% is cleaner than overall 50%. * ✅ **Reserve absorbs slippage and fees** — small operational drag is paid from reserve. * ✅ **Plan tax-payment reserves separately** — quarterly liquidity for tax obligations. * ✅ **Document reserve sizing in your operator runbook** for clarity. * ✅ **Re-evaluate reserve quarterly** during your scheduled review. * ✅ **Resist the temptation to over-deploy** during good months — recency bias is real. ## What's next Sizing per pair, per mode, per venue. The full risk framework. Pair with reserves for resilient operation. Strategy isolation alongside reserves.