A trader risks the same small percentage on three individual setups and assumes the account exposure is simply diversified. Yet all three shares may belong to one sector and react to the same index move. Separate stop orders do not prevent them from being hit together.
Look beneath the ticker
Before opening another position, ask what could move both charts at once. Candidates include a broad equity selloff, a peso or dollar move, commodity pricing, interest-rate news, or concentrated sector sentiment. Correlation changes over time, so a historical coefficient is context rather than a guarantee.
Mark aggregate loss
List open positions with their planned loss at the current stop. Then group exposures that share a plausible driver. If every stop were filled with realistic slippage during the same event, what would the combined account loss be?
This does not require pretending the future is known. It prevents the position-by-position view from hiding a crowded idea.
Responses are part of the plan
A trader’s written rules may cap total open risk, reduce size among related positions, accept only the clearest setup, or avoid adding exposure around a scheduled event. The suitable boundary depends on personal circumstances and should not be invented during market stress.
Technical analysis can make each chart look distinct. Risk review must also see the portfolio they form together.
Training note: This article is educational and does not recommend a security, derivative, or trade.
Practise this in training