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Factors to consider when making your personal trading checklist.

1. Market Trend.

As you plan out your personal trading checklist you need to consider the current market condition. You will have to define your market and decide whether you will go with it or against it. If you are new to trading it is usually recommended that you trade with the current market trend. Doing this will increase your chances of making a profit, another good thing is that you don’t need to have a specific opening price.

You can have something like this in your checklist, “The trade is the direction of the trend.”

2. Trade investment money.

The personal trading checklist also gets you to pay attention to your investment amount. Having it in mind will help you keep your eyes on the prize by reminding you just how much you intend to make from the trade. You will also need to make sure that the trade amount is right before you begin trading.

The statement on your checklist could be something like this, “The trade is the right amount.”

3. Trading News and Announcements.

You need to have a trusted source that will give reliable news and announcements on what’s happening in the trading world. Considering such news and announcements might influence a change of mind and help you dodge certain losses.

Have something like this in your trading checklist, “Check on relevant news or announcements.”

4. Your Physical and Emotional state.

Trading requires you to be in good physical shape and have the right mindset. Failure to this and you might end up doing the wrong market analysis which is only followed by initiating a losing trade. The only aftermath in such a case is sustaining heavy loses.

You might have something like this in your personal trading checklist, “Am in good physical and mental health.”

5. Risk-reward ratio.

This is a measure of your expected profit for each dollar you invest in a trade security. (1:6 means that for every one dollar you risk, you stand to make six dollars.)

After you have established your risk-reward ratio, you will be able to know whether or not to set a stop-loss order in your trade. This is an automatic order to close a trade whenever the market goes below a certain price. It’s main aim is to make sure you don’t incur heavier losses.

Have something like this in your personal trading checklist, “The trade’s risk-reward ratio is favourable.”

Coming up with your personal trading checklist might seem difficult at first but it might be what sets you out to make a profit or loss. Always remember it will be different for each individual trader. For more info on trading plans and strategies look here.

Goodluck!

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