Correlated exposure: three trades that are really one

[Amanhasnoname]

Long EURUSD, long GBPUSD, short USDCHF. Three positions, three setups, and effectively one big bet against the dollar. If the dollar rallies, all three lose at once.

For scalpers running several pairs at once, hidden correlation is a quiet risk. Individual risk per trade may look fine, while the combined exposure is several times higher.

A basic check is listing open positions by currency. Count how many are long or short each currency. If a single currency shows up in most of them, the true risk is concentrated.

Correlations also change. EURUSD and GBPUSD move together most of the time, but they diverge on UK or Eurozone specific news.

Practical limits help: a maximum number of positions per currency, or a rule that total risk across correlated trades counts as one.

Position sizing across correlated trades should add up, not treat each as independent.

How is correlated exposure tracked across simultaneous trades?