I’m curious about how traders monitor things like total account risk, daily drawdown, floating P&L, position size and exposure while actively trading.
Do you rely mainly on MT4/MT5, a spreadsheet, an EA, a calculator, or a combination of tools?
What’s the most difficult part of keeping track of your risk in real time?
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Quantitative analysis based on the security’s volatility.
I do have multiple positions open occasionally but my idea of multiple will be 2 or 3.
I must sound like a real lightweight.
But my point is, given that forex pairs are so highly correlated (either positively or negatively) how do you find multiple positions which are not effectively all based on the same trading idea?
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Thanks. Do you use a particular tool or dashboard to monitor that volatility and how it affects your total risk when you have multiple positions open?
That’s a very interesting point. When you have 2 or 3 correlated positions open, how do you personally determine whether your combined exposure has become too high? Do you calculate it manually, use a tool, or mainly rely on experience?
I treat every position as an individual. Each has their own rules, orders, stops. Each position has to show positive return over the past 6 years though. The account is what it is. I just know that no one position will kill the account and I have so many diversified that each small edge adds up to a greater one.
Yes, same here. I always had same question.
Thanks for sharing. How do you currently keep track of your total risk when you have multiple positions open? Do you use your trading platform, a spreadsheet, a calculator, or another tool? And what part of the process do you find most difficult?
For me the hardest part is recognizing correlation between open positions. For example, if you’re short EUR/USD and long USD/JPY at the same time, both are essentially long USD, so your actual combined risk is much higher than the simple sum of each position.
I like keeping things simple, so I usually group positions by their common base currency before calculating total risk, then keep overall exposure within 5-10% depending on how many positions I have open. That way I avoid accidentally doubling down on the same direction without realizing it 
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I don’t need a tool. My capital risk if the stop-loss on a position is hit is usually very low - typically 2 or 3% of my account capital. If I do have say 3 positions open, even if all 3 were stopped out, the total loss would not be critical. But my main defence is making sure the 3 positions are not correlated with each other so they’re less likely to be all stopped out together.
That’s hard to do in forex as every national economy is connected to every other economy, so their currencies often move in step with each other. And of course all equity markets tend to react to the US equity market as this is the biggest.
I check the risk on each trade based on the stop and then keep a simple spreadsheet to track all. The most difficult part though is to track the correlation because EUR/USD, GBP/USD and AUD/USD may look like separate trades, but they can all add to the same USD exposure.
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agreed you can run a correlation matrix perhaps (1yr , 5yr , 10yr) the result will show that the pairs are mostly positively correlated (EUR/USD & GBP/USD) if negative (EUR/USD & EUR/CHF) a hedge can be identified. However, given we are trading CFD hedging is hard due to spread and commission.
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I use a combination of MT5 and a simple spreadsheet. MT5 helps me monitor floating P&L and margin in real time, while the spreadsheet shows my total risk across all open trades.
Before entering, I calculate how much I could lose if every stop-loss is hit. I also group correlated positions.
The hardest part is managing correlation when several trades move together. I try to keep total open risk within a fixed percentage of my account and avoid increasing position sizes just to recover a loss.