diff --git a/lib/trading/position-manager.ts b/lib/trading/position-manager.ts
index 9edebe8..c6947a4 100644
--- a/lib/trading/position-manager.ts
+++ b/lib/trading/position-manager.ts
@@ -75,6 +75,7 @@ export class PositionManager {
   private config: TradingConfig
   private isMonitoring: boolean = false
   private initialized: boolean = false
+  private validationInterval: NodeJS.Timeout | null = null
 
   constructor(config?: Partial<TradingConfig>) {
     this.config = getMergedConfig(config)
@@ -197,6 +198,142 @@ export class PositionManager {
     }
   }
 
+  /**
+   * Schedule periodic validation to detect ghost positions
+   */
+  private scheduleValidation(): void {
+    // Clear any existing interval
+    if (this.validationInterval) {
+      clearInterval(this.validationInterval)
+    }
+    
+    // Run validation every 5 minutes
+    const validationIntervalMs = 5 * 60 * 1000
+    this.validationInterval = setInterval(async () => {
+      await this.validatePositions()
+    }, validationIntervalMs)
+    
+    console.log('🔍 Scheduled position validation every 5 minutes')
+  }
+
+  /**
+   * Validate tracked positions against Drift to detect ghosts
+   * 
+   * Ghost positions occur when:
+   * - Database has exitReason IS NULL (we think it's open)
+   * - But Drift shows position closed or missing
+   * 
+   * This happens due to:
+   * - Failed database updates during external closures
+   * - Container restarts before cleanup completed
+   * - On-chain orders filled without Position Manager knowing
+   */
+  private async validatePositions(): Promise<void> {
+    if (this.activeTrades.size === 0) {
+      return // Nothing to validate
+    }
+    
+    console.log('🔍 Validating positions against Drift...')
+    
+    try {
+      const driftService = getDriftService()
+      
+      // Skip if Drift service not initialized
+      if (!driftService || !(driftService as any).isInitialized) {
+        console.log('⏳ Drift service not ready, skipping validation')
+        return
+      }
+      
+      // Check each tracked trade individually
+      for (const [tradeId, trade] of this.activeTrades) {
+        const marketConfig = getMarketConfig(trade.symbol)
+        
+        try {
+          const position = await driftService.getPosition(marketConfig.driftMarketIndex)
+          
+          // Ghost detected: we're tracking it but Drift shows closed/missing
+          if (!position || Math.abs(position.size) < 0.01) {
+            console.log(`🔴 Ghost position detected: ${trade.symbol} (${tradeId})`)
+            console.log(`   Database: exitReason IS NULL (thinks it's open)`)
+            console.log(`   Drift: Position ${position ? 'closed (size=' + position.size + ')' : 'missing'}`)
+            console.log(`   Cause: Likely failed DB update during external closure`)
+            
+            // Auto-cleanup: Handle as external closure
+            await this.handleExternalClosure(trade, 'Ghost position cleanup')
+            console.log(`✅ Ghost position cleaned up: ${trade.symbol}`)
+          }
+        } catch (posError) {
+          console.error(`⚠️ Could not check ${trade.symbol} on Drift:`, posError)
+          // Continue checking other positions
+        }
+      }
+      
+      console.log(`✅ Validation complete: ${this.activeTrades.size} positions healthy`)
+      
+    } catch (error) {
+      console.error('❌ Position validation failed:', error)
+      // Don't throw - validation errors shouldn't break monitoring
+    }
+  }
+
+  /**
+   * Handle external closure for ghost position cleanup
+   * 
+   * Called when:
+   * - Periodic validation detects position closed on Drift but tracked in DB
+   * - Manual cleanup needed after failed database updates
+   */
+  private async handleExternalClosure(trade: ActiveTrade, reason: string): Promise<void> {
+    console.log(`🧹 Handling external closure: ${trade.symbol} (${reason})`)
+    
+    // Calculate approximate P&L using last known price
+    const profitPercent = this.calculateProfitPercent(
+      trade.entryPrice,
+      trade.lastPrice,
+      trade.direction
+    )
+    const estimatedPnL = (trade.currentSize * profitPercent) / 100
+    
+    console.log(`💰 Estimated P&L: ${profitPercent.toFixed(2)}% → $${estimatedPnL.toFixed(2)}`)
+    
+    // Remove from monitoring FIRST to prevent race conditions
+    const tradeId = trade.id
+    if (!this.activeTrades.has(tradeId)) {
+      console.log(`⚠️ Trade ${tradeId} already removed, skipping cleanup`)
+      return
+    }
+    
+    this.activeTrades.delete(tradeId)
+    console.log(`🗑️ Removed ${trade.symbol} from monitoring`)
+    
+    // Update database
+    try {
+      const holdTimeSeconds = Math.floor((Date.now() - trade.entryTime) / 1000)
+      await updateTradeExit({
+        positionId: trade.positionId,
+        exitPrice: trade.lastPrice,
+        exitReason: 'manual', // Ghost closures treated as manual
+        realizedPnL: estimatedPnL,
+        exitOrderTx: reason, // Store cleanup reason
+        holdTimeSeconds,
+        maxDrawdown: Math.abs(Math.min(0, trade.maxAdverseExcursion)),
+        maxGain: Math.max(0, trade.maxFavorableExcursion),
+        maxFavorableExcursion: trade.maxFavorableExcursion,
+        maxAdverseExcursion: trade.maxAdverseExcursion,
+        maxFavorablePrice: trade.maxFavorablePrice,
+        maxAdversePrice: trade.maxAdversePrice,
+      })
+      console.log(`💾 Ghost closure saved to database`)
+    } catch (dbError) {
+      console.error('❌ Failed to save ghost closure:', dbError)
+    }
+    
+    // Stop monitoring if no more trades
+    if (this.activeTrades.size === 0 && this.isMonitoring) {
+      this.stopMonitoring()
+    }
+  }
+
   /**
    * Get all active trades
    */
@@ -244,6 +381,9 @@ export class PositionManager {
 
     this.isMonitoring = true
     console.log('✅ Position monitoring active')
+    
+    // Schedule periodic validation to detect and cleanup ghost positions
+    this.scheduleValidation()
   }
 
   /**
@@ -258,6 +398,12 @@ export class PositionManager {
 
     const priceMonitor = getPythPriceMonitor()
     await priceMonitor.stop()
+    
+    // Clear validation interval
+    if (this.validationInterval) {
+      clearInterval(this.validationInterval)
+      this.validationInterval = null
+    }
 
     this.isMonitoring = false
     console.log('✅ Position monitoring stopped')