Portfolio heat formula
Each row’s planned stop risk is |entry − stop| × quantity. The entered heat-limit percentage is converted to an amount only so the calculator can show the mathematical difference between that input and the summed planned stop risk.
Worked hypothetical example
With an account value of 10,000, the default rows risk 50, 40 and 20 at their entered stops. Total planned stop risk is 110, so portfolio heat is 1.10%. If the comparison limit you enter is 5%, that represents 500 and leaves a mathematical difference of 390.
What this calculator deliberately leaves out
- Correlation and common-factor exposure are not estimated; several positions can move together even if their individual stop-risk amounts look separate.
- Gaps, slippage and fills can make a realized loss differ from the entered stop distance.
- Contract multipliers, leverage rules, derivatives mechanics and multi-currency conversion are not inferred. Normalize inputs to the same account unit first.
- The entered heat limit is supplied by you. PreBreakout does not select or rate a “safe” portfolio heat level.
How this fits with the other tools
Use Position Size to model one position from a chosen risk budget, Stop Loss to inspect one entered stop distance, and Partial Exit after part of a position is closed. Portfolio Heat answers a different question: how much planned stop-risk is represented by several positions at the same time?