What is a pre-trade checklist?
A pre-trade checklist is a fixed set of questions a trader answers before every entry — about the setup, the risk and their own state. Some items are critical: a wrong answer means no trade. The point is to compare the trade with the plan at the moment it is easiest to break it.
Key points
- Answered before the click, not reviewed after it.
- Three blocks: the setup, the risk, the trader.
- Critical items work as a gate; the rest raise or lower the score.
Why checklists work
Checklists cut errors in other high-stakes work. When a surgical safety checklist was introduced in eight hospitals, deaths fell from 1.5% to 0.8% and complications from 11.0% to 7.0% (Haynes et al., 2009).
In trading, a checklist turns a vague intention — “I’ll be disciplined” — into specific if-then rules. A meta-analysis of 94 tests found that if-then plans have a medium-to-large effect on reaching goals (Gollwitzer & Sheeran, 2006).
What goes in it
- Setup: is it in my written plan? Am I entering where the plan says, not chasing?
- Risk: is the stop defined in price and in money? Is the size calculated? Am I inside my daily limits?
- The trader: is this to win back a loss, or FOMO? How do I feel, 1–10?
How it is scored
In StatWidget each question can have an answer that means “per plan”. The share of answers that match the plan becomes an entry score from 1 to 10, and every critical item answered against the plan takes off a point. Critical items must be answered before the checklist can be sent, but a low score never blocks the trade — it is recorded as “against plan”.
Example
A level-based checklist: 1) Price is at a level from my morning plan (critical). 2) The stop is beyond the level and the size is calculated for 0.5% risk (critical). 3) Reward is at least three times the risk. 4) Not a re-entry within 20 minutes of a loss (critical). Four answers per plan give 10/10. If the reward is only twice the risk, the score is 8/10 and the trade is still allowed.
Numbers are illustrative.
Questions
How many items should a pre-trade checklist have?
Few enough to answer in under a minute. Our 12-question template takes about 30 seconds once it is a habit; a short checklist you always answer beats a long one you skip.
What is the difference between a pre-trade checklist and a trading journal?
A journal records the trade after it happens; a checklist checks it before. The checklist can stop a bad trade, the journal shows which ones still got through and what they cost.
Sources
- Haynes A.B. et al. A Surgical Safety Checklist to Reduce Morbidity and Mortality in a Global Population. New England Journal of Medicine, 2009.
- Gollwitzer P.M., Sheeran P. Implementation Intentions and Goal Achievement: A Meta-analysis of Effects and Processes. Advances in Experimental Social Psychology, 2006.