final-trading-checklist-before-going-live

There is always a level of anticipation before you place a live trade. Your heart beats a little faster, and the brain is churning with ideas and scenarios, you just want to hit "buy" or "sell" and see what happens. That's the reality of an emotional process - jumping into a live trade without a plan is the quickest way to lose money!

This is why professionals utilize a checklist. A pilot is not getting on a flight without having their pre-check executed - why risk your capital without checking a few most important items? The final checklist will give you discipline, accountability to yourself, and confidence to place a trade.

1. Did You Define Your Risk?

Step 1 is risk, risk, risk. Before you think about the profit or make an evaluation on how much you could potentially make in this trade, think about the question: "How much am I willing to lose on this trade?" Setting a stop loss should not be up for discussion. 

Many trader's will consider risking 1-2% of their account on a trade as a safe amount. If you risk too high, you will be risking larger drawdowns. If you risk too low, you may not feel committed to the trade. Find a happy medium that fits your style and stick to it.

2. Is the Trade Part of Your Plan?

Every trader should have a written strategy or written plan, whether it be based on a breakout, trend-following or if you are a range trader. Before entering into a trade, ask yourself: does this set up actually fit your rules?It's simple to convince yourself that "this time is different." By following your own system, you stay consistent; not by chasing the next random set-up. If the trade does not satisfy the way you trade, then it doesn't deserve your money. 

3. Is the Market Environment Appropriate? 

Markets can vary in their behavior. A trend strategy in a choppy range could wreak havoc, just like a range strategy in high volatility is often a disaster. 

Ask yourself: What market am I in right now? Is there something on the horizon that can move the market? Understanding what environment you're in helps you not use the wrong tool for the job. 

4. Do You Have Clear Entry and Exit Levels? 

Professional traders know their entry, stop loss, and target level before they click the button. Amateurs generally figure this out after they click the button, which leaves them at the mercy of their emotions. 

Your checklist should include:

Entry price (why here, not elsewhere?)

Stop loss (where is this trade invalid?)

Take profit (is the reward at least 2x the risk?) 

5. Are You in the Correct Mental State? 

Trading is as much about psychology as it is about charts. It is often better to step away if you are stressed, distracted, or seeing red. For instance, a trade placed out of frustration or boredom could undo hours of careful thinking, so spend the time to self-check: am I calm, focused, and ready? If not, skip the trade, and the market will be there tomorrow. 

6. Did You Size Your Position Appropriately? 

Position sizing is a bridge between risk management and strategy. A position that is too large, will hurt with even a small market move against you, while a position that is too small, makes the trade insignificant to evaluate. 

A simple reminder: 

*Everything will vary by pair, leverage, etc. So calculate properly! 

7. Do You Have a Safety Plan? 

Even with the finest work and preparation, surprises occur. Your Internet can go out, news can beat to the punch causing slippage, and your platform can freeze. 

Ask yourself: if something catches me outside of normal trading rows, what is my plan? Some traders have apps to use for these situations, and others turn their alerts to active. 

No risk assessment is too great to figure out in advance to avoid panic later! 

Why a Cheat Sheet Works 

Some traders think a checklist slows them down; actually, it speeds up the decision-making process by removing the second-guessing part of the equation. When you know exactly what to look at prior to executing the trade, you save yourself from second-guessing upon entering. 

It also adds consistency to your trading. A trader will win once or lose once, but over time, the portfolio with a structured setup will yield the steady profit. 

Final Thoughts 

Trading isn't about doing a trade quickly; it's about discipline. A final checklist will help you have a plan when emotions run high, and you never enter blind. In your checklist, risk, plan, environment, levels, mindset, sizing, and a safety plan. If you checked all of these things, you can enter with confidence. 

The market loves to test you, but this gives you confidence to work through the discipline. Build your list, execute it, and you will feel the difference in your results, discipline, and mindset. 

For more practical guides and tools to shorten your trading habits, please look at the Learn section of Wikilix. A little preparation goes a long way to protecting capital and building consistence.