Holding several open trades does not necessarily mean holding several independent risks. Two FX pairs, stocks in the same sector, related indices or crypto assets can all respond to the same underlying factor.
Examples of shared exposure
- Two currency pairs driven by the same dominant currency.
- Several technology stocks sensitive to the same sector move.
- Simultaneous positions in an index and its components.
- Several crypto assets reacting to the broader market move.
Look at aggregate risk
If three trades each risk 1R but all depend on the same scenario, economic risk may be more concentrated than analysing them separately suggests.
What to add to the journal
Record simultaneous exposure, group/sector, direction and shared thesis where relevant. Then review whether the worst sessions coincide with excessive concentration.
Correlation is not fixed
Relationships between assets change. Historical correlation does not guarantee that instruments will move together in the future. Use it as context, not certainty.
Turn the analysis into limits
If concentration proves problematic, test risk limits by group, sector or market theme in addition to individual trade risk.