Field note · 4 September 2026
Size from the worst week, not the best idea
Open heat is what you lose if every stop is hit. Correlated names are often one bet wearing several tickers.
Traders who come to the position desk can usually describe their favourite setup in more detail than their size. They know the candle. They do not know what the week costs if three stops are hit on the same morning. That sum is the heat. It is the number the plan should be built around.
Heat is not the loss you have already taken. It is the loss still open if every current stop is reached. A calm screen can hide a large heat when several positions point the same way.
A plain piece of arithmetic
Take an account of ₩20,000,000 set aside for trading, separate from rent. A person decides that one idea may lose half of one percent. 1R is ₩100,000. That figure is the distance from entry to stop, converted into a position size. If the stop is ₩500 away on a single share, the size is two hundred shares, because 200 times ₩500 is ₩100,000. The attractive part of the chart does not change the arithmetic.
If three such positions are open, heat is ₩300,000, or 1.5 percent, before any of them has moved. The plan needs a heat limit as well as a per-trade R. Otherwise a careful 0.5 percent rule becomes 2 percent by lunch simply because four setups appeared.
Names that move together
Two KOSPI industrials and an index future are not always three ideas. On a risk-off morning they can be one bet in three jackets. The desk asks a blunt question: if the index falls through the level on your sheet, how many of these stops are likely to be touched together? When the honest answer is “all of them,” the plan counts them as one unit of heat, not as a diversified list.
This is the part people argue with. The charts look different up close. The weekly swings often do not. We would rather a plan admit the overlap than pretend three logos are three risks.
Start from the week you can repeat
Size is easier to keep when it is chosen from a bad week you are willing to have again, not from the best trade in the log. If a week of minus 4R would make you abandon the plan, then a daily cap of 2R and a heat limit of 2R is already the edge of what you can repeat. Writing 1 percent per trade because a book suggested it, while your log shows you cannot sit through the matching loss, is how plans become decorations.
Bring the log to the desk if you want the arithmetic done on your own numbers. The ₩20,000,000 figure above is only a teaching example. Your R should be dull enough to read on a Sunday without a speech attached.