Portfolio heat
Add up the risk across every open position at once, because position sizing protects you from one trade and nothing protects you from all of them together.
Runs entirely in your browserRuns entirely on your device — nothing you type is sent anywhere. Educational only, and not investment advice.
How to use this calculator
Each step names a control you will find on screen above.
- Enter each open position
Every trade you currently hold, with its own stop. The risk on each is the distance to its stop multiplied by the quantity.
- Read total heat
The sum, as a percentage of capital. This is what you lose if every stop is hit — which is not a hypothetical, it is what a bad week looks like.
- Assume a correlated sell-off
Toggle this on. It stops everything out together, which is exactly what happens on the days that matter.
- Group by sector
Four positions in banking is one position in banking, four times over. The tool shows this; portfolios rarely do.
Worked example: Six careful trades that add up to a bad week
Six open positions, each sized to risk exactly 1% of capital. Four of the six are private-sector banks.
What to enter
- Open positions
- 6
- Risk per position
- 1% each
- Assume a correlated sell-off
- On
What it shows you
- Total heat
- 6%
- Banking cluster
- 4%
- On a bad day for banks
- −4% in a session
- Genuinely independent bets
- 3, not 6
- Suggested ceiling
- 6% total, 2–3% per sector
effectively one position
Where this is taught
A calculator gives you a number. These explain what the number means and when it misleads you.
- Market Basics11 minESOPs and RSUs: when your employer pays you in sharesVesting, exercise, the two taxable events, and the concentration risk of having your salary and your savings in the same company.
- Market Basics11 minDirect stocks or mutual funds?Not a question of which is better, but of what each demands from you. An honest test, and the structure most people should actually use.
- Technical Analysis11 minManaging several open trades at oncePosition sizing protects you from one trade. Portfolio heat protects you from all of them going wrong on the same day.
- Technical Analysis12 minRunning more than one systemTwo uncorrelated strategies are genuinely better than one. Two correlated ones are the same strategy at double size, plus the confusion of not knowing which is working.
- Risk & Psychology12 minWhen one holding becomes most of your portfolioThe best problem in investing, and a genuinely difficult one. Concentration created by success is different from concentration you chose.