The Setup Checklist
The seven questions we ask before every trade
Most losing trades were lost before the order was placed. Not because the idea was bad, but because nobody asked the boring questions first: where is the zone, which way is the bigger trend, where exactly am I wrong, how much do I make if I am right.
A checklist fixes that. It is not a strategy and it does not pick trades for you. It is seven questions, asked in the same order every time, and a rule: if one of them has no honest answer, there is no trade today. That rule is the whole point. The checklist is there to keep you out of the trades that were never setups in the first place.
Each chapter takes one question. It explains what the question is really asking, how to answer it on a chart, and what to do when the answer is no. Every chapter ends with a worked example and a short summary you can read on its own. The last page is the checklist itself, laid out to print and keep next to the screen.
Read it once in order. After that, use the last page.
- 1Is there a zone?
- 2Which way is the trend on the higher timeframe?
- 3Is there a catalyst, or is it noise?
- 4Where exactly is the entry, and what invalidates it?
- 5What is the reward against the risk?
- 6Does the options structure fit the thesis?
- 7What does the plan say about size and exit?
- 8The Setup Checklist