For Business

Trading Psychology

How to Build a Pre-Trade Checklist

A pre-trade checklist is the plan turned into yes-or-no questions, asked in the same order in the thirty seconds before every order, and stopped at the first no. This paper shows you an example checklist of five questions answered for a real euro trade on 17 December 2025; the idea as a pilot's walk-around; the same card on 12 December, stopped at the first box; the checklist as a turnstile between the chart and the order window; and the row on your platform, where three of the five answers sit in three columns.

Difficulty
Intermediate
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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Five questions on a real morning

A pre-trade checklist is the plan turned into yes-or-no questions, asked in the same order every time, in the thirty seconds before an order. This example checklist has five, answered on the morning of 17 December 2025 for the euro against the dollar. Is the plan's picture on the chart? Yes, at 10:15, the close at 1.17166. Is the size the rule's? 0.40 lot, where a lot is the standard trade size and 0.40 of one makes 25 pips worth 100 dollars, one percent of 10,000. Is the stop typed at the plan's distance? 1.16916. Is the target typed? 1.17666. Is a trade already open today? No. Five yes answers, then the order. One no, and the checklist stops there.

A pilot's walk-around

Picture a pilot's walk-around, the same five points on the aircraft in the same order before every flight, however many flights the pilot has made and however sure they are of the plane. It is not done because the pilot doubts the aircraft. It is done because it is always done, and that is exactly why it works: on the one morning in a thousand when something is wrong, it is the routine that finds it, not the pilot's judgement. A pre-trade checklist is a walk-around. Its value is that it does not depend on how the trader feels that morning, which is the one thing about the morning that cannot be trusted.

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