Risk Management for Multiple Open Trades

A strong inflation print lifts the dollar sharply. The five dollar-sensitive positions move against you together and reach their stops within the same hour. Planned loss is 500 USD, or 5%. With stops filling a few pips worse than requested in a fast market, the realised figure is closer to 600 USD, or 6%. The sixth trade is untouched.

Nothing here required a mistake at the individual trade level. The book simply contained one idea five times, and a single number, total open risk by theme, would have caught it before the market did.

Guardrails worth setting

1. A maximum on combined open risk. Commonly 3% to 6% of equity, lower while a strategy is unproven.
2. A maximum on exposure per currency or theme. Around 2% to 3% is a common ceiling, applied to the net position rather than to individual tickets.
3. A maximum number of concurrent positions. Not because the number itself is dangerous, but because attention is finite and each additional position degrades the management of the others.
4. A margin floor. A margin level you will not go below, kept well clear of your broker's margin call threshold so that a normal adverse move never approaches it.
5. A rule for what happens at the ceiling. Skip the new trade, take it smaller, or make room by reducing a correlated position. Decide which, in advance, so the choice is not made while a fresh setup is in front of you.

Attention is the constraint people underestimate. Six positions across four instruments, each with its own level to watch and its own management rule, is a genuine workload, and the quality of every decision falls as the count rises. The trades that get mismanaged are rarely the ones you were watching. They are the ones you were not, while dealing with something else.

Managing the book rather than the tickets

Two habits do most of the work. The first is moving stops to break-even where the trade justifies it, because that is the only way open risk falls without closing anything. A book of six positions where four have stops at entry is carrying 2% of real risk, not 6%.

The second is preferring the best expression of an idea over every expression of it. If your method signals the same setup on four instruments, taking the one with the cleanest structure at full theme size usually beats taking four at reduced size: one spread instead of four, one stop to manage, and the same exposure to the view you actually hold.

Both habits point at the same underlying discipline. Look at the account, not the ticket. Before opening anything, the question is not whether this trade is correctly sized, it is what the account loses today if everything currently open fails together. If the answer would be unacceptable as a single position, it is unacceptable as a portfolio, and the risk rules you wrote while calm should be the thing that says so.