Take Some Heat

"Taking heat" describes a trade that has moved against you on paper while you're still holding it. The position isn't closed, so no loss is locked in yet, but the open trade is currently showing red — an unrealized loss — and the trader has decided to stay in it rather than exit.

The phrase comes from the idea of pressure or discomfort: the trade is "hot" because it's uncomfortable to watch, not because anything has technically failed. A trader who says they're willing to "take some heat" is telling you they've accepted that the position may dip further into a loss, or bounce around near breakeven, before it potentially recovers or hits their target. It's a statement about tolerance for temporary drawdown, not a prediction that the trade will work out.

The nuance that trips people up is that taking heat is a deliberate, pre-decided choice tied to a specific stop-loss or invalidation point — it is not the same as freezing up and hoping a losing trade turns around. A disciplined trader who says they'll "take some heat" still knows exactly where they'll exit if the trade keeps going against them; someone who has no exit plan and is just hoping isn't taking heat, they're exposed to unlimited risk. The phrase also has nothing to do with the direction of the eventual outcome — a trade you took heat on can still close for a profit, a loss, or flat.