A pre-trade checklist records whether a decision meets rules written in advance. It does not prove the strategy’s edge or guarantee that errors disappear. Store an answer, supporting evidence and check time, such as a closed-bar number, current quote and calculated volume.

What a setup checklist actually is

A setup checklist checks a specified plan, not a universal set of five to eight rules. Record pass, fail or missing data. Missing information is not a default pass; “not applicable” must already be allowed by the plan version. A mandatory failed or unverified condition blocks submission within that procedure.

Why a written list beats memory and impulse

A practical checklist reduces reliance on memory by placing required actions in a fixed order. For a trading example, verify the instrument and order direction, the entry and invalidation, the position size and the event calendar before submission. The list's usefulness depends on its actual use and the quality of its rules.

Separate the strategy’s rules from the process used to execute them. A compliant losing decision and a noncompliant winning decision belong on different audit axes. The hypothetical results below illustrate this distinction without borrowing performance evidence from surgery or aviation.

Seven questions before you enter

The set below is a starting point, not an oracle. Every trader adapts it to their own strategy and instruments over time, but these seven questions cover the core of the "take it or skip it" decision.

  1. Do I have a valid setup that matches my plan? It must fit a pattern you wrote down and tested in advance, not a flash of intuition.
  2. Does the setup match its defined context? Record the plan’s actual trend or range condition and data time. A countertrend strategy needs its own rule; the direction label alone does not establish probability.
  3. Is the trigger available now? Record its confirmation time, data source and chart without later bars. The strategy must define what counts as its trigger.
  4. Are entry, invalidation and exits specified? Record order type, entry condition, exit rule and expiry. Confirm later which orders the server actually accepted.
  5. Does volume fit the monetary budget and aggregate exposure limits? Include fees, price distance and an execution scenario; round to the contract step and check the result. A one-percent limit is not a universal safety norm.
  6. Does event timing comply with this plan? Record calendar, clock, check time and any predefined release-exclusion window. No fixed number of hours applies to every strategy, and calendars omit unexpected news.
  7. Can I carry out the procedure? Verify connection, account access, required attention and a recovery plan. Record a reason to pause rather than treating a checklist as a psychological diagnosis.

Do not score “six out of seven” if the seventh requirement is mandatory. Other chart strengths cannot compensate for an absent risk limit. Passing checks means the order can be considered within the recorded plan, not that it must be sent or will win. Recheck dependent conditions when quotes, exposure or signal status change.

Keep the checklist short enough to use, but retain mandatory risk and order checks. The process supports consistency without proving a trading edge.

An illustrative example — one pass through the list

Calculate a hypothetical risk budget: USD 10,000 account capital, chosen budget USD 50, or 0.5%. Assume EUR/USD contract 100,000 EUR per lot, pip 0.0001 worth USD 10 per lot, minimum and step 0.01 lot. Entry Ask 1.10020 and SL Bid 1.09820 are 20 pips apart. Assume USD 7 total round-trip commission per lot with no minimum, plus a two-pip adverse-execution reserve. Financing and conversion charges are zero in this model.

Planned loss per lot is 20 × 10 + 2 × 10 + 7 = USD 227. Budget division 50/227 ≈ 0.22026 rounds down to 0.22 lot: USD 49.94 versus USD 52.21 at 0.23. Spread is already in Ask entry/Bid exit; do not add it again. The reserve is not a slippage cap. A fill six pips below SL instead of two gives (200+60+7) × 0.22 = USD 58.74, beyond the budget. Confirm symbol specification, accepted volume and protective orders separately.

For a separate fictional audit, compliant trades A/B return USD +40/−50; noncompliant C/D return +80/−30. Total profit is USD 40, but the compliant subset totals −10 and deviations +50. Reclassifying C after seeing its gain would change the audit retrospectively. Four observations establish neither a losing strategy nor a benefit from breaking rules.

Each check must refer to the same plan version

Changing thresholds invalidates an earlier pass. Two checkmarks alone do not establish that one plan was checked.

Mixing check versionsWith spread 2.5 pips and SL18 pips, v 1 thresholds spread≤3 and SL≤25 both pass. Version 2 thresholds spread≤2 and SL≤20 fail spread. Combining v 1 spread and v 2 SL checks does not confirm v 2.CHECKMARKS FROM TWO VERSIONSCurrent data: spread 2.5 pips; SL18 pips.Plan v 1Spread≤3SL≤25Spread:YESSL:YESPlan v 2Spread≤2SL≤20Spread:NOSL:YESMixed versions: v 1 spread +v 2 SL.Two YES marks do not fully check v 2.Consistent v 2: spread NO, SL YES.

Our fictitious two-check card does not replace the article's seven questions. v 1: spread≤3 pips and SL distance≤25 pips; v 2: spread≤2 and SL≤20. Current spread 2.5 and SL18 pips. Other conditions are outside this example. No order or outcome forecast. TradingView — Strategies confirms that inputs and model properties belong in the test record; results without settings do not reproduce conditions.

Fictitious v 1 and v 2 differ only in check thresholds. Both use the same current data.

The old “spread OK” check uses threshold 3 and cannot confirm the later threshold 2. A v 2 SL check cannot repair that gap. Attach rule versions to each piece of evidence and recheck changed conditions. A new plan number should identify actual thresholds, not merely a document title. The consistent v 2 card fails to meet both conditions despite earlier green marks.

How to run the list in practice

A dated paper record can preserve history, as can a spreadsheet. Store opportunity ID, clock and date, plan version, evidence, answers, decision and rejection reason; add actual execution and net outcome separately. A profitable deviation does not become compliant, and a compliant loss does not prove the list was filled incorrectly. Historical associations in a pivot table do not certify prediction on new data.

Individual questions deserve a deeper look. We lay them out one at a time in the pre-trade step-by-step routine, you slot the list into the wider trading plan, and the habit of using it belongs to the broader system of trading discipline. What happens once the entry is live is covered in managing an open trade, and the trader's workshop covers the wider workflow.

What to do tomorrow

  1. Write the required conditions and their evidence fields, including trade, daily and aggregate-exposure limits. Clearly mark mandatory checks and the meaning of missing data.
  2. Use a dry run to check that the form is understandable and complete. If a mandatory condition fails, follow the written pause or rejection procedure; no universal two-hour pause is established.
  3. Review process adherence separately from net results. Do not remove a protection merely because it has not blocked a trade or tune signal rules to known winners; keep a new version and evaluate it on new data. With the same USD 227-per-lot model and budget USD 40, round down to 0.17 lot: USD 38.59, while 0.18 gives USD 40.86. This still does not cap actual slippage.