Total open lots across positions on a funded account

[Fairman]

Total open lots across positions on a funded account

Most prop risk rules talk about drawdown, daily loss and sometimes the maximum lot size per trade. Fewer people think about total exposure across positions, but several firms have limits on that too, or they flag accounts where total open lots suddenly jump.

For scalpers it can come up in a few ways. You might scale in, adding a second and third position to a winning trade. You might have two setups on correlated pairs at the same time. Or an EA might open positions on several pairs at once. Each trade alone looks fine, but together they add up to a much larger position than your usual size.

From the firm's point of view, total exposure is what matters for their risk. If you have five positions open on dollar pairs all in the same direction, that's one big dollar trade, regardless of how you split it.

My approach is to set a maximum total open lot size for the account, separate from the per trade size. If adding a new position would push the total over that limit, I don't add it. For correlated pairs I count them together.

Check your firm's terms for anything about maximum exposure, maximum open lots or maximum positions. Some have explicit numbers, others have vague language about excessive risk.

[FXS HongKong Scalper]

Correlated positions are where total exposure builds up fastest. A long EURUSD and a long GBPUSD at the same time are almost one larger dollar short. For EAs that trade several pairs, a rule that limits total open risk across all positions, measured in money at the stops rather than in lots, is a simple guard. Some traders also limit the number of positions that share a currency, for example no more than two trades involving the yen at once. That reduces the chance of a single move hitting several positions at the same time.

[Fairman]

Some firms also look at the margin used, not just the lots. With the low leverage many prop accounts have, a few positions can tie up a lot of margin. If you're near the margin limit, a sudden move can push the account toward a stop out even before the drawdown limit is hit. Keeping total exposure modest helps both with firm rules and with margin. Margin is shown in the terminal, and checking it before adding a new position takes a second. If margin used is already high, it's a sign the account is carrying too much, even if each trade looked small when you opened it.

[Fairman]

Different instruments have different lot sizes in terms of risk. A lot on an index or gold can carry much more money per point than a lot on EURUSD. If you trade several instrument types, count exposure in terms of money at risk or notional value, not raw lots. Otherwise your limit means very different things across instruments. Money at risk per point, or notional value, gives a common measure. A simple spreadsheet listing the value per point for each instrument you trade makes the conversion quick before each new position.

[Fairman]

Pending orders matter too. If you have several limit orders waiting at different levels, and the market moves through all of them, you suddenly have much larger exposure than you planned. Count pending orders as potential exposure when you set them up. Cancelling some of them as others fill is a simple way to keep the total in check. Brokers often let you set pending orders to cancel each other, so when one fills the others are removed. That's an easy way to stop several fills from stacking up beyond your limit.

[Fairman]

If you use a trade copier to run the same trades on more than one account, check whether the firm counts exposure across accounts. Some firms have rules about the total exposure a single trader can carry across all their funded accounts, especially in the same direction. That's a separate limit on top of the per account rules. If you run copiers, read the firm's terms on this carefully. Some explicitly limit the total allocation per trader, and exceeding it across accounts can lead to all of them being reviewed together.