System
- What type of trader will I be? Swing, trend trader, trend follower, day trader, Elliot Wave, Fibonacci, CAN SLIM, option trader, another, or a combination?
- What time frame will I be trading on?
- What are my trading rules?
- What signals my entry?
- What will signal my exit?
- Do I use a trailing stop or a price target to lock in profits?
- What will I be trading?
- Will I trade long or short or both?
- What is the probability of my trade working out based on historical data?
- What has to happen to invalidate my trading system and make me look for flaws in my thinking?
Psychology
- How big of a position size can I mentally and emotionally handle trading?
- Does my chosen trading method fit my personality for activity and risk tolerance?
- Do I truly believe that my method will work and be profitable?
- Do I enjoy trading?
- Do I have the mental strength to persevere until successful in trading?
Risk
- How much of my trading capital will I risk per trade?
- How many losses in a row with this level of risk will lead to blowing up my trading account?
- How much will I lose at one time if all my open positions go against me at the same time?
- How correlated with each other are all your open positions and your potential trading vehicles that are on your watch list?
- Do you fully understand the potential risk in what you are trading?
