Portfolio Risk Management

I am building a portfolio which once fully optimized and diversified, has a monthly volatility of 2.5%. I want to build in a portfolio “kill switch” where once the portfolio experiences a total loss of x% in value, all trades are immediately closed and the portfolio goes to cash.

I am currently quantifying where this kill switch should be located. I was thinking that according to the 68/95/99.7 rule, I should put the kill switch at -4sigma of the monthly volatility, or 10% (statistics show a 4sigma event occurs once every 43 years, which I consider well beyond the life of this particular portfolio). Is this a safe assumption?