Check-List
Before you hit that “buy” or “sell” button like it’s a cosmic slot machine, pause! Because even seasoned traders know that pure adrenaline and gut feelings make terrible financial advisors. That’s why we have the pre-trade checklist – it’s basically your trading chaperone, making sure you don’t make any regrettable, impulsive decisions you’ll be too embarrassed to tell your portfolio manager about later. Think of it as adulting, but for your money.
21. We Use a Check-List
Using a checklist before entering a trade is a widely adopted and highly recommended practice among professional traders for several critical reasons:
Ensuring Discipline and Consistency: A pre-trade checklist serves as a robust framework that compels traders to adhere strictly to their predefined trading plan and strategy. By systematically verifying each criterion, it eliminates arbitrary decisions and promotes a consistent approach across all trades, which is paramount for generating repeatable results and accurate performance analysis.
Mitigating Emotional Biases: Trading environments are inherently volatile and can trigger powerful emotions such as fear of missing out (FOMO) or greed. A checklist acts as a crucial psychological barrier, forcing a pause for objective evaluation before execution. This structured review helps to depersonalize the decision-making process, ensuring trades are based on logic and analysis rather than impulsive reactions.
Enhancing Risk Management: A checklist provides a systematic method to confirm that all risk parameters are in place and adequately managed. This includes verifying position sizing, setting appropriate stop-loss and take-profit levels, and assessing the risk-reward ratio. Consistent adherence to these checks is vital for capital preservation and preventing disproportionate losses on individual trades.
Confirming Trade Validity: Before committing capital, a checklist ensures that all necessary technical and fundamental conditions for a valid setup have been met. This might involve checking market trends, confirming specific chart patterns, validating signals from multiple indicators, and being aware of upcoming economic releases that could impact the trade. It acts as a final due diligence step to filter out low-probability opportunities.
Facilitating Learning and Improvement: By providing a structured record of pre-trade considerations, checklists contribute significantly to the post-trade review process. They enable traders to objectively analyze what went right or wrong, identify recurring mistakes, and refine their strategy over time based on tangible data rather than vague recollections.
In essence, a pre-trade checklist transforms trading from a potentially reactive and emotional endeavor into a disciplined, systematic, and professionally managed process, ultimately contributing to long-term profitability and sustainability.
💰Quotes:
“Enter the trade — then sit on your hands like a monk!”
“We don’t click and panic. We click and chill.”
“Traders who wait, get paid. Traders who fidget… donate!”
“We enter the trade, then do absolutely nothing like pros.”
“Let the market work. You’re not its boss.”
💰Normal Tone Slogans:
“Enter with a plan, then let the trade play out.”
“The work is in the setup — the result comes with patience.”
“We don’t babysit trades. We trust our edge.”
“Entry is action. Waiting is discipline.”
“After entry, emotion has no place — only patience.”
The Overall Market Condition
Understanding the overall market condition is one of the most important aspects of successful trading. Before entering any trade, you must first ask:
What kind of market am I in?
Trend? Range? Volatile? Calm?
🧭 Types of Market Conditions:
1. Trending Market
Price is moving consistently in one direction (up or down).
Higher highs & higher lows = uptrend
Lower highs & lower lows = downtrend
📌 Best for trend-following strategies (e.g. pullbacks to EMA, breakouts)
🔹 2. Ranging (Sideways) Market
Price moves between support and resistance with no clear direction.
Often found after a trend or before news events.
📌 Best for range trading (buy low/sell high with confirmation)
🔹 3. Choppy/Uncertain Market
Price is erratic, full of wicks, no clean structure.
Hard to trade — low-quality signals.
📌 Best action: stay out or wait for clarity.
🔹4. Volatile Market
Large, fast price movements — often driven by news or uncertainty.
📌 Best for experienced traders, scalpers, or those who can handle quick moves.
🔹4. Volatile Market
📊 Why Market Condition Matters:
It determines your strategy — a good setup in a bad market is still a bad trade.
It helps you filter trades and stay aligned with high-probability environments.
It keeps you from overtrading during poor conditions.
✅ How to Assess Market Condition:
Look at higher timeframes (4H, Daily) for structure.
Use EMAs (like 8/23) to guide trend strength.
Identify key support/resistance levels — are they holding or breaking?
Look at price action behavior — trending cleanly or wicking all over?
Check economic calendar — is news causing volatility?
🧠 Pro Insight:
They know when to push, when to wait, and when to stand aside.