Free resource · printable
The pre-trade checklist.
Nine questions to answer before you click buy or sell. Every one of them targets the same failure: the trade that goes wrong with no stop and no size limit — the only outcome that actually destroys accounts.
By FirstPip editorial team · Updated 2026-09-08 · Educational content · No broker owns this site
Quick answer. Run these nine checks before every forex trade: know the instrument, set a stop where the idea is wrong, fix 1R at about 1% of the account, size so the stop costs exactly 1R, and stop for the day after three losses in a row.
Why nine questions and not a strategy
Any trade has four possible outcomes: right with a strong move (large profit), right but the move stalls (small profit), wrong but with a stop and correct size (small loss), and wrong with no stop, too much leverage or stubbornness (large loss). An account containing only the first three looks healthy. Every account problem lives in the fourth — and eliminating it needs nothing sophisticated: a stop on every trade, and size within the limit. This checklist is nine plain questions that make that fourth outcome almost impossible to reach by accident. Match the entry to your plan with the order types cheat sheet.
Sources: FirstPip knowledge base — Foundational trading rules and Risk per trade; the CFTC customer advisory below on how leverage magnifies losses. Figures on this page are the arithmetic of consecutive losses, not guarantees about any single trade.
The checklist
- Do I understand this instrument well enough to have a view?
If you cannot explain in one sentence why the pair might move, you are guessing. Trading only instruments you can actually model is the first foundational rule. - Where exactly is my stop, and why there?
The stop belongs where the trade idea is proven wrong — a structural level on the timeframe you entered on. Not an arbitrary distance, and not an unrelated historical level. - What is 1R for me on this account, in money?
Fix the risk unit once — commonly 1% of the account — and keep it constant. Every outcome is then measured in multiples of that unit. - If the stop has to be tight, have I cut size rather than moved the stop?
Cut the size. Moving the stop to fit a size you already picked is the same error in the other direction. - Can I actually supervise this trade?
A tight stop on a small timeframe obliges you to stay at the screen. If you are going to walk away, the stop must sit at a wider structural point — or you do not take the trade. - What is the realistic reward if I am right, against that 1R?
If the honest answer is less than the risk, the trade needs a reason to exist beyond boredom. - How many losses have I taken in a row today?
Three consecutive losses is a hard stop: step away and recover composure before returning. Three at 1% is 3% — recoverable. Trading through it is what turns 3% into 30%. - Am I trying to win back an earlier loss?
If yes, close the platform. Carrying "I have to get it back" weights every subsequent decision, and it is the single emotion that flips an investor into a gambler.
Print it. Use your browser's print function — the navigation, banners and sign-up form are automatically removed, leaving just the checklist.
Why each question earns its place
None of these nine is about predicting the market — they are about controlling the one trade in front of you. Questions one and two force you to admit whether you actually have an edge and where the idea is proven wrong; a stop belongs at the structural level on the timeframe you entered on, not at a round number or an unrelated historic level. Questions three, four and five keep the loss fixed: you set 1R once, derive the position size from the stop distance, and when the stop must be tight you cut the size rather than move the stop. Question six ties the trade to your real life — a tight stop you cannot sit and watch is not a plan. And questions seven to nine police the mind: a reward smaller than the risk needs a reason to exist, three losses in a row is a hard stop for the day, and the urge to win a loss back is the single moment that turns an investor into a gambler.
The arithmetic behind question 4
Question eight is not a mood rule; it is math. Fixing your risk small is what buys you the right to be wrong several times without the account falling apart. Here is exactly what a losing streak costs at four common risk levels.
| Risk per trade | Account after 3 straight losses | Account after 10 straight losses | Consecutive losses to halve the account |
|---|---|---|---|
| 1% | 97.0% | 90.4% | ~69 |
| 2% | 94.1% | 81.7% | ~34 |
| 5% | 85.7% | 59.9% | ~14 |
| 10% | 72.9% | 34.9% | ~7 |
Pure compounding of consecutive losses, not a forecast — it says nothing about how likely a streak is, only what one would cost. Note the last column: with a fixed fraction of the account you never mathematically reach zero, so the honest yardstick is how many losses it takes to halve the account. At 1% that is roughly 69 in a row; at 10% it is about 7. That gap is the entire argument for keeping the risk unit small.
Once you can answer question four in your head, the position size cheat sheet and the calculator below turn it into a number in seconds. And before you fund an account, the leverage limits by region card tells you which regulator a broker answers to.
Frequently asked questions
What should I check before entering a forex trade?
Nine things: that you understand the instrument, where your stop goes and why, what 1R is in money, that your position size makes the stop cost exactly 1R, that you cut size rather than move the stop, that you can supervise the trade, that the reward beats the risk, how many losses you have taken today, and whether you are trying to win a loss back.
How much of my account should I risk per trade?
A common rule is a fixed 1% of the account per trade, kept constant. At 1%, even ten losses in a row leaves about 90% of the account; at 10% risk the same streak takes it below 35%. Small, fixed risk is what lets you be wrong several times without damage.
Should I move my stop or reduce my position size?
Reduce the size. Your stop belongs where the trade idea is proven wrong; if that makes the risk too large, cut the number of lots so the loss still equals 1R. Widening the stop to fit a size you already picked defeats the whole point.
When should I stop trading for the day?
After three losing trades in a row. Three losses at 1% is only about 3% of the account — recoverable with one good trade. Trading through a losing streak to 'get it back' is what turns a 3% dip into a 30% hole.
Can I print this checklist?
Yes. Use your browser's print function — the site automatically hides the navigation, banners and sign-up form so only the checklist prints. Keep it beside your screen and run it before every order.
Keep going
Sources
- FirstPip knowledge base — Foundational trading rules; Risk per trade (S001, S002)
- CFTC — Customer Advisory: Eight Things You Should Know Before Trading Forex
- CFTC — Forex Frauds