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A checklist is vital for trading | DailyForexTrading

assetsfx.com

A checklist is vital for trading | DailyForexTrading

Without a checklist, your trading plan cannot be considered as complete.

It's great if you already have a trading strategy in place. It's time to take things a step further and create a list of tasks.

A glance at the list will precede every trade, and you won't place a trade until everything on the list is present.

The length of a trading plan can range from five to fifty pages, depending on its type.

Whatever its length, it will outline your overall plan. Unfortunately, when attempting to use your competitive advantage in the market, it's simple to bend the rules "just a little bit."

Before you know it, you're engaging in transactions that are hardly related to your trading strategy.

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Most traders lose money because they start to take random setups outside their trading edge, not because their strategy is poor. It typically only requires a few hours of trading based on your mood.

Therefore, it's crucial to have a concise and clear checklist—typically no longer than 10 sentences—that outlines every aspect of your trade entry.

Before making a trade, you can even review every little detail (I do it). You'll eventually remember that checklist like it was yesterday.

But it's also crucial to follow it honestly without checking it twice. The ability to adhere to rules is a distinct subject. 

You're taking a chance without a list

How many traders are constantly seeking "something else" or a different trading approach?

As soon as they begin to lose money, they will switch to the next idea, pattern, or trading system rather than mastering the previous one.

Instead of focusing on the core of trading, which is, in my opinion, the development of one strategy, they have been operating on the surface for years.

They occasionally even stumble across something that they like and that begins to function.

But after a while, he may start to flout the rules if he experiences emotional stress, such as joy after a victory or fear and rage after a defeat.

A novice may make a number of irrational trades over the course of a few hours due to his vulnerability to emotion, wiping out a significant portion of his account.

There are many other causes for this kind of inefficiency, but one of the first things you can do to fix it is to use a checklist.

Because you'll accept the first trade you find if you don't know what you're looking for on the market.

Being "right or wrong" is tricky

If you follow your rules, you can only be right; if you choose setups at random, you can only be wrong.

Remember that this is not a long-term stable way to trade; if you have a loser stuck to your setup, you are correct; if you have a huge win but a random trade, you are incorrect.

Yes, traders can make some educated guesses about how prices will change, but only if they adhere to their rules and employ their system.

The market won't follow a trader's coloured drawings just because he drew a box or a line, and the trader won't be rigid in his predictions. 

The role of a trader is to take a setup based on testing and experience, let go of trade expectations, and manage naturally as he goes.

This is a very complex issue, in my opinion, and warrants its own post at a later time.

Using a trading checklist is essential in the trading process because it encourages discipline, helps traders follow their trading plan, and boosts confidence.

Keeping a trading checklist gives traders a list of inquiries they must respond to prior to making trades.

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