We have all made trades that didn’t make sense, only to look back and wonder why we made that trade in the first place. As beginners in the market learning to day trade we can make a ton of mistakes. Many of those mistakes can be avoided though.
How many of you actually have a system? Do you stick to it 100%? I didn’t! When I first started trading I would instead just jump into positions just for the sake of trading. It wasn’t until a few years of hanging in there that I started using a checklist. I wanted to see certain things in the charts I was trading before placing a trade, but more importantly, I wanted something visual that actually had my attention while I was trading. I created a checklist to help me establish boundaries, find setups, and pull the trigger. My checklist also has risk management checks to ensure I am not over risking my account.
This checklist will hopefully be beneficial to all of you who don’t have anything like this yet, but be sure you use it as a tool to prevent yourself from going outside of your boundaries. Feel free to download the template and tweak it however you want to, to suite your trading style!
This is the checklist I use for my trading. The header (Micro Futures) is whatever you are trading EX. Low Floats. I am just currently trading Micro Futures!
I typically like to look at longer time frames to get an idea of the overall trend such as the Day chart, or, the 4Hr chart then circle it on the checklist.
I put the 3 Trades section on there because I use to overtrade very frequently. Three trades is all I need to know whether I am in the zone, or this just isn’t my day. There are instances where I will put on another trade if I notice a big move, so set this to whatever you want.
The EDGE portion means that there is a trade forming that I have done well with in the past, Like a dip back to the EMA on a strong uptrend! I typically write a small note there to describe what type of trade I took!
I must know the Stop out before I enter the trade!!!! I check this block and place a stop to ensure I am trading in my own best interest. I highly suggest you have a plan to escape a trade if it is not working out.
Profit Targets are important but a little tougher to pinpoint. I like to go in with a small/medium size…….2 to 3 contracts, and scale myself out as the trades go in my favor. I then typically let the last contract ride while placing my stop at break even.
After I have made my three trades that’s typically when I call it quits and will write in my profit/loss for the day!
Let me know if you liked the post and will or will not use the checklist for your own trading. Have something similar? Let us know what you have on your trading checklist!!