The kill-switch is the most severe rung of the Risk Governor's drawdown ladder: once portfolio-level drawdown crosses a defined threshold, the engine blocks new entries across every strategy, not just the one that's currently losing, until drawdown recovers. Existing positions continue to be managed (stops and exits still fire normally); it's specifically new risk that gets shut off.
Below the kill-switch threshold, the Governor typically runs intermediate risk-reduction tiers first, sizing new positions smaller as drawdown deepens, rather than jumping straight from "normal" to "fully halted." The kill-switch is the last rung on that ladder, not the only one.
It exists because the deepest, account-threatening drawdowns are rarely caused by one single strategy failing in isolation. They're caused by several strategies losing at the same time, which a per-strategy stop-loss alone has no mechanism to catch.
Educational content, not investment advice. zengtrade is paper-first and non-custodial.