What Is Portfolio Heat

Three stops on one account

Portfolio heat is what every open stop adds up to at one moment, as a share of the account. Take three trades open at once on 17 December 2025: the euro against the dollar bought at 1.17398, the pound against the dollar at 1.33751, gold at 4338.28, each sized so that its stop is worth 100 dollars, one per cent of a 10,000-dollar example account. One per cent is the rule for each trade. Three per cent is the heat, because all three stops are live at the same moment and all three could be reached on the same day. The distances are examples. The sum is the account's number, not any one trade's.

A hob with three burners lit

Picture a hob with three burners lit. Each dial is turned to one, and each burner on its own is a small flame; the heat in the kitchen is all three together. A trade is a burner and the dial is the risk on it, one per cent here. Portfolio heat is every burner that is lit at once, and it is the kitchen's temperature, not any burner's. A fourth burner turned to one takes the kitchen to four. Turning one off, by closing the trade or by its stop being reached, takes it back down. The dials are set one at a time. The heat is read all at once, and it is read by nobody unless the trader reads it.

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