The 10-Point Checklist
1. Signal source: Did this idea come from your system or from impulse? Only system-generated ideas proceed.
2. Edge articulation: Can you state in one sentence why this has positive expected value? If not, pass.
3. Risk/reward: Is the ratio at least 1.5:1? If not, the setup is not attractive enough.
4. Higher timeframe: Does the broader context support the trade? Counter-trend trades get reduced sizing.
5. Position sizing: Is the position sized per your volatility-adjusted rules?
6. Portfolio fit: Does this increase correlation concentration? Diversification matters.
7. Stop placement: Is the stop at thesis invalidation, not an arbitrary level?
8. Macro context: Is liquidity supportive? Are recession indicators green?
9. Emotional state: Are you calm and analytical? Only trade when you are in the right mental state.
10. Execution plan: Do you know your entry method and venue?
Why Checklists Work
You already know you should not trade without a stop or oversize on impulse. The checklist ensures you follow through on what you know, even when emotional pressure pushes you to deviate. The checklist takes 60 seconds. The errors it prevents can save you thousands per month.