Trading Checklists to Follow

Pre-Trade Analysis Checklist

  1. Market Conditions:

    • Identify the overall market trend (bullish, bearish, sideways).

    • Check for major economic news or events that could impact the market.

  2. Stock Selection:

    • Ensure the stock aligns with your trading strategy (momentum, reversal, etc.).

    • Review the stock's fundamentals for longer-term trades.

  3. Technical Analysis:

    • Analyze charts for entry and exit points.

    • Identify key support and resistance levels.

    • Look for patterns and indicators that support your trade idea.

  4. Volume and Liquidity:

    • Check the stock's average volume to ensure liquidity.

    • Verify that the bid-ask spread is acceptable for your trade size.

  5. Risk/Reward Analysis:

    • Determine the potential reward and compare it to the risk.

    • Ensure the trade meets your minimum risk/reward ratio criteria.

  6. Position Sizing:

    • Decide on the amount of capital to allocate based on your risk management rules.

    • Calculate the number of shares or contracts to trade.

  7. Entry and Exit Plan:

    • Define your entry point, target price, and stop-loss level.

    • Plan how and when you will exit the trade, whether in profit or loss.

Post-Trade Review Checklist

  1. Trade Execution:

    • Review if the trade was executed according to the plan.

    • Note any deviations from the planned entry or exit points.

  2. Performance Analysis:

    • Evaluate the outcome of the trade (profit/loss).

    • Assess whether the risk/reward ratio held true for the trade.

  3. Emotional Assessment:

    • Reflect on your emotional state during the trade.

    • Identify any emotional decisions that impacted the trade outcome.

  4. Lessons Learned:

    • Document what worked well and what didn't.

    • Note any patterns or tendencies in your trading that you need to address.

  5. Strategy Adjustment:

    • Decide if adjustments to your trading strategy are needed based on the trade outcome.

    • Plan how to implement these adjustments in future trades.

Risk Management Protocols Checklist

  1. Daily Loss Limit:

    • Set a maximum daily loss limit after which you stop trading to avoid emotional decisions.

  2. Trade Risk Limit:

    • Determine the maximum percentage of your capital you are willing to risk on a single trade.

  3. Stop-Loss Orders:

    • Always use stop-loss orders to limit potential losses.

    • Review the placement of stop-loss orders to ensure they provide adequate protection.

  4. Position Sizing:

    • Use position sizing to control risk, ensuring no single trade can significantly impact your capital.

  5. Diversification:

    • Avoid concentrating too much capital in a single sector or stock.

    • Spread risk across different assets or strategies.

  6. Regular Reviews:

    • Conduct regular reviews of your portfolio to assess risk exposure.

    • Adjust your positions and strategies based on changing market conditions or in response to losses.

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