Discover and read the best of Twitter Threads about #portfolioheat
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Otherwise called the "Portfolio heat", a term coined by Ed Seykota, helps a trader control the total portfolio risk. This number, which is usually around 5-10%, depends on the trader's personality. 1/n
An aggressive trader would expose 10% of capital at once. A conservative trader would expose 5% of capital. A reckless trader would not know how much is risked, which could lead to a disaster if the market does a U-turn. This metric can help one survive in the long run! 2/n
So, what is your portfolio heat as of today? #Trading #investing #portfolioheat #riskmanagement #moneymanagement #riskcapital
