Trading Checklist
Table of Contents
Before Buying
Check the markets and trade in the direction of the prevailing market trend.
Check the industry - are the stocks showing signs of topping out or bottoming?
Make sure the industry is top ranked.
Look at the weekly scale for any threatening chart patterns.
Find another chart pattern in the same stock and see how it performed in the past.
Check the indicators.
Check how this industry is doing compared to others.
Wait for price to turn up before buying.
Get a quote before trading.
If the stock is up too much intraday, skip the trade.
Look for overhead resistance.
Look for underlying support.
Avoid any stock showing a dead-cat bounce within the last six months.
When to Sell
The stock is about to hit your stop.
A bearish chart pattern has broken out downward.
The stock has closed below an up-sloping trendline.
Price has hit the target.
Stocks in the industry are topping out.
The market is up but the stock is down.
Indicators are diverging from price.
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Presented by:
John F. Smith
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Views: 750
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Uses: 118
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Tasks: 22
Introduction
Who it's for
This Trading Checklist is for anyone who wants a simple, practical way to get things done without missing steps.
- Avoid forgetting - keep all your Trading essentials in one place (external memory)
- Save time - start from a proven Trading structure instead of a blank page
- Stay on track - track progress, come back later, and keep momentum
- Coordinate with others - share the list and divide responsibilities
- Learn the process - follow the steps in a sensible order, even if it's your first time
How to use it
How to use this Trading Checklist
- Save Trading Checklist to your free Checklist account so your progress is saved and synced across devices.
- Customize it in the app: remove anything that does not apply, then add your own details for Trading (dates, sizes, addresses, notes).
- If others are involved, invite them to collaborate and divide responsibilities.
- Work through the list: check items off as you go, and set reminders for time-sensitive steps.
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Trading Checklist Frequently Asked Questions
What is a trader checklist?
A trader checklist is a structured list of criteria and actions that traders use to guide their trading decisions. This checklist helps ensure that all essential factors are considered before entering or exiting a trade, minimizing emotional decision-making. A comprehensive trading checklist typically includes:
- Market Conditions: Analyze current market trends and volatility.
- Entry and Exit Points: Define clear entry and exit strategies based on technical analysis.
- Risk Management: Establish stop-loss levels and position sizing to protect capital.
- News and Events: Stay informed about relevant economic news or events that could impact the market.
Using a trader checklist can lead to more disciplined trading, enhanced focus, and ultimately, better trading outcomes.
What does every day trader need?
Every day trader requires several essential tools and resources to succeed in the fast-paced trading environment. Here’s a list of what you need:
- Trading Platform: A reliable and user-friendly platform for executing trades.
- Market Research: Access to real-time data, charts, and analysis tools.
- Trading Plan: A well-defined strategy outlining entry and exit points, risk management rules, and profit targets.
- Risk Management Tools: Stop-loss orders and limit orders to protect your capital.
- Education: Continuous learning through courses, books, or webinars on trading strategies.
By equipping yourself with these essentials, you can enhance your trading performance and make informed decisions.
What is the 5 3 1 rule in trading?
The 5 3 1 rule in trading is a simple guideline used by traders to manage their risk exposure effectively. This rule suggests that traders should limit their risk on each trade as follows:
- 5% Risk on Each Trade: Limit the total risk to no more than 5% of your trading capital on a single trade.
- 3 Trades Per Day: Set a maximum of three trades per day to maintain focus and avoid overtrading.
- 1 Trading Strategy: Stick to one proven trading strategy at a time for consistency in your approach.
By following the 5 3 1 rule, traders can maintain discipline while managing their risks effectively.
What is the 3-5-7 rule in trading?
The 3-5-7 rule in trading is another risk management strategy designed to help traders make disciplined decisions while limiting exposure. The breakdown is as follows:
- 3% Risk Per Trade: Limit each trade's risk to no more than 3% of your total trading capital to avoid significant losses.
- 5 Trades Per Day: Aim for a maximum of five trades daily to prevent emotional fatigue and maintain focus on quality setups.
- 7-Day Review: Conduct a review of your trades every week to assess performance, refine strategies, and learn from mistakes.
Implementing the 3-5-7 rule fosters better risk management while promoting consistency in your trading activities.
What is the 90% rule in trading?
The 90% rule in trading refers to the concept that approximately 90% of traders will not consistently profit over time due to various factors such as lack of discipline, improper risk management, or emotional decision-making. Understanding this rule emphasizes the importance of developing a robust trading strategy and maintaining discipline throughout your trading journey. To improve your chances against this statistic, consider the following tips:
- Educate Yourself: Continuously learn about market dynamics, technical analysis, and trading psychology.
- Stick to Your Plan: Develop a well-defined trading plan with clear rules for entry, exit, and risk management.
- Practice Discipline: Avoid impulsive trades by adhering strictly to your plan and rules. By recognizing the implications of the 90% rule, traders can adopt strategies that enhance their potential for success.
What is the 50% rule in trading?
The 50% rule in trading is often used as a guideline for setting stop-loss orders or determining potential reversal points within price movements. This rule suggests that when a stock retraces or pulls back by approximately half (50%) of its previous movement (either up or down), it may indicate a potential reversal point or support/resistance level. For example:
- If a stock rises from $10 to $20 (a $10 increase), a pullback to $15 (50% retracement) may signal an opportunity for buyers if other indicators confirm strength at that level. To effectively utilize the 50% rule in your trading strategy, consider combining it with other technical indicators such as moving averages or volume analysis for confirmation before making trade decisions.