Here are the basic questions you need to ask yourself before opening a trade.

goldenedge

Well-Known Member
#1
A trading checklist is very important. I find it always better to second guess my setups before opening a position so that I really know what I am doing and that it's not a half-analyzed trade. Here are some questions you need to answer before opening a trade. (BTW, any more questions and input would be greatly appreciated.)

1) Is support and resistance well mapped out? Is the chart fully analyzed? Are your entry and exit levels based on the analysis?

2) What kind of chart pattern is it? Does it move according to your trading plan and directional bias from earlier in the day?

3) Is the trade in the direction of the trend? What kind of market behavior is being observed?

4) Any fundamental data influencing the market at this moment?

5) Are you waiting for candle close before making an entry? Why not?

6) Is position sizing calculated according to the trade and risk %?

7) What's the risk reward ratio for this trade? Does it work in accordance to your trading system?

8) Find reasons why chart can move against your trade and make you hit SL. Minimum two different scenarios.

9) Do you really accept that this trade you are taking is noted as a loss in your head? Imagine price hitting the stop loss and closing the trade. Now, are you comfortable with imagining it as a loss?

10) What kind of mindset are you in right now? Did you meditate?

11) Any dopamine rushing habits? What are your energy levels right now? Any lack of sleep or general lifestyle problems?

12) How desperate are you on a 1-10 scale to make money today?

13) Do you know what kind of market behaviors you are most profitable in? What are your top trading setups?

14) How volatile is the market? Is it possible for the trade to hit your SL and reverse thereby making you emotional?

15) Are you 100% sure you accept the probabilistic risk for this trade? Re-check your trading setup once again.
 

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