Evaluate a system with one pre-trade checklist

One checklist before the order

The archive describes a usable plan as one that names setup, exit, and money-management rules, is retested for consistency, and can be retired when it no longer meets that standard.

Editorial interpretation: treat those operator constraints as a single pre-trade checklist. If the risk budget, size math, instrument fit, holding horizon, and review fields cannot be specified before the order, the system has not produced a valid signal. The correct action is abstention.

Money-management fields in the gate

A money-management gate can pair a 1:3 planned risk-reward ratio with a 2% account-risk limit, shown as $100 risk on a $5,000 account.

Position sizing is computed from fixed risk and stop distance: $100 risk and a 50-pip stop maps to two mini lots at $2 per pip.

In a hypothetical 25-trade week of 16 losses at $100 and 9 wins at $300, the arithmetic residual is $1,100 before costs and $950 after a $150 commission deduction.

A $12,000 annual goal on $5,000 is broken into $50 daily, $250 weekly, and $1,000 monthly increments, with the caveat that a target that looks achievable on paper may still be unrealistic.

Plan-fit, style, and approach

The plan-fit test asks whether setup, exit, and money rules match the operator and can be retested. Operator style, whether scalper, day, swing, or position, must match the methodology. Adopting another trader's style without that fit is not treated as sufficient.

The market approach is selected to match style: top-down context, fundamentals, or participant sentiment, with news-release timing cited as a fit for scalpers and daytraders.

Fear of loss or uncertainty, and greed, including a first-month $5,000 profit target on $5,000 capital, or increasing size to force wins, are treated as plan-adherence failures, not as separate tactics.

Instrument-fit across sessions and pairs

Instrument choice is an evaluation step. Session behavior differs, with the yen described as more volatile in Asian hours. Range or channel rules are to be checked on pairs such as EUR/AUD, EUR/GBP, EUR/CHF, and CHF/JPY rather than assumed to transfer.

Journal audit of rule breaks

A journal of date, instrument, prices, size, stop, target, result, setup, and drawdown is used to audit whether stops, partial exits, and size followed the written rules.

Editorial note: the journal audit is the after-the-fact counterpart of the pre-trade checklist. It detects rule breaks in the same fields that had to be specified before the order.