Portfolio risk
5 min read · Educational content, not financial advice
Holding several 'different' positions doesn't always mean you're diversified. EUR/USD and GBP/USD, for example, are often highly correlated — both tend to move against the US dollar together, meaning a large adverse USD move could hit both trades at once, effectively doubling your real risk exposure without you realizing it.
Portfolio-level risk management looks at total exposure across all open positions, not just the risk of each trade in isolation, and may deliberately cap combined risk across correlated pairs rather than simply summing individual per-trade risk limits.
This is a natural extension of the single-trade risk management covered earlier — the same 1–2%-per-trade discipline needs a portfolio-level ceiling too, especially for traders running multiple positions simultaneously.