🔄 Methods to Handle A number of Trades With out Overexposure
🎯 The Lesson
Opening a number of trades without delay feels productive — such as you’re “diversifying.”
But when all of your positions transfer the identical manner, you’re not diversified — you’re overexposed.
Good merchants know: extra trades ≠ extra security.
It’s about correlation and complete threat, not commerce depend.
⚙️ Step 1: Calculate Your Whole Publicity
Each commerce carries a % threat of your steadiness.
In the event you threat 2% per commerce and open 5 trades →
2% × 5 = 10% complete publicity
Which means if all hit cease loss, you lose 10% of your account — in a single transfer.
That’s not buying and selling — that’s roulette.
Preserve complete open threat under 6% always.
Instance:
📊 Step 2: Watch Correlation
EUR/USD and GBP/USD typically transfer collectively.
So when you purchase each, you’re doubling your publicity to the USD.
In actuality, that’s one commerce disguised as two.
To repair it:
✅ Combine pairs from totally different areas (e.g. EUR/USD + AUD/JPY).
✅ Keep away from stacking trades that depend on the identical foreign money energy or weak spot.
🧩 Step 3: Use a “Portfolio Threat Restrict”
Set a max drawdown rule for all open trades mixed.
Instance:
🔑 Step 4: Suppose in Threat Items, Not Trades
Every commerce = 1 unit of threat.
While you open new positions, ensure that complete items ≤ 6.
It’s how skilled prop companies handle merchants — and why they survive volatility whereas others blow up.
🚀 Takeaway
Buying and selling a number of pairs doesn’t make you safer — managing complete publicity does.
Commerce much less, management threat extra, and your fairness curve will lastly begin to appear to be a marketing strategy.
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