Building a Pre-Trade Checklist
6 questions before every trade. Any "no" means no trade.
Researched and written by Laurent The 6-Question Checklist
Print this. Place it next to your monitor. Complete it before every single trade:
1. Is there a clear setup in my strategy? (Yes / No)
2. What is my stop-loss level? _______ (specific price)
3. What is my take-profit level? _______ (specific price)
4. What is my position size? _______ (lots, calculated)
5. Am I within my daily/weekly loss limits? (Yes / No)
6. Am I trading based on analysis or emotion? (Analysis / Emotion)
If any answer is "No," blank, or "Emotion": DO NOT TAKE THE TRADE.
Why Checklists Work
Airline pilots use checklists before every flight. Surgeons use checklists before every operation. Not because they don't know the steps, but because under pressure, humans skip steps. A checklist forces you to verify each condition objectively, regardless of how you feel.
The most powerful question is #6. It forces brutal honesty: "Am I taking this trade because my strategy says to, or because I'm frustrated, bored, excited, or trying to recover losses?" If the answer is emotion, the trade is not valid. Period.
What Traders Consistently Report
Track this for yourself and the pattern traders consistently report is the same: trades taken after completing a checklist show a noticeably higher win rate and better average risk-reward than trades taken without one. The checklist does not improve analysis quality; it filters out the impulsive trades that drag down the statistics.
Before and After: Same Setup, Two Traders
To make this concrete, here are two journal entries from the same EUR/USD long setup at 1.0820 with a 30-pip stop. Both traders saw the identical chart. One skipped the checklist. One used it. The trade was a loser for both, but the damage was very different.
Trader 1 journal (no checklist):
Position size: 1.0 lot ("felt good about this one, sized up")
Stop-loss: none set initially, "I'll watch it"
Outcome: price dropped to 1.0790, panic-closed at 1.0786, loss locked at -34 pips x 1.0 lot ($10/pip) = -$340 on a $10,000 account = -3.4% in one trade.
Notes: "Lost more than I planned. Should have set the SL."
Trader 2 journal (used checklist):
Position size: 0.17 lots, calculated for $50 risk (0.5% of $10,000)
Stop-loss: 1.0790 (30 pips), order set on platform at entry
Take-profit: 1.0880 (60 pips), order set on platform at entry
Outcome: price hit SL at 1.0790, loss locked at exactly -30 pips x 0.17 lots = -$50 = -0.5% of account.
Notes: "Trade hit stop, system worked, sized correctly. Next setup."
Same setup. Same losing direction. Trader 1 lost 6.8x more than Trader 2. The checklist did not predict that the trade would lose. The checklist made the loss survivable when it did lose.
A Concrete Sample Checklist
If the 6-question version above feels too generic, here is a tighter yes/no version that some traders prefer because every answer is binary and unambiguous:
- Does this setup match the exact pattern in my written strategy? (Y/N)
- Is my stop-loss order placed on the platform right now? (Y/N)
- Is my position size calculated from my risk %, not chosen by feel? (Y/N)
- Is the spread within normal range for this pair and session? (Y/N)
- Am I within my daily and weekly loss limits? (Y/N)
- Would I take this trade if I had zero P/L today (no need to recover, no euphoria)? (Y/N)
Key Takeaways
- • A physical checklist prevents emotional trades by forcing objective evaluation.
- • The checklist should have yes/no questions only. No "maybe" or "close enough."
- • If any answer is "no," there is no trade. No exceptions.
- • The most important question: "Am I trading based on analysis or emotion?"