CALCULATORS · PORTFOLIO HEAT

Portfolio heat calculator

One percent per trade sounds safe until eight of them are open in the same sector. This adds the risk up.

What am I actually risking?

Position sizing is done one trade at a time, but the account loses money all at once. Heat is the sum of what every open stop would cost if the day went against all of them together — which, in a correlated book, is the day that happens.

HOW IT WORKS

Four steps, in order

1

Enter the account size.

2

Count the positions you have open.

3

Set the risk you took on each.

4

Say how many could move together.

Portfolio heat

heat = open positions × risk per position

Total heat
6.00%
If every stop hits
$1,500.00
Correlated cluster risk
4.00%
If that cluster goes
$1,000.00

Frequent questions

Short, practical answers. Trade-offs explained, no advice framing.

Other calculators