Have you heard of a personal trading checklist before?

A personal trading checklist is a document, a file, or basically anything that contains your summarized trading plan. This plan includes everything you need in order to prepare yourself for trading. It may also contain a unique set of rules that you can make use in order to improve your trading experience and win more trades.

As you can probably guess based on its name, personal trading checklists are 100% personal. Although you’re free to get inspiration from other traders, especially those who are more experienced than you, trading checklists are ideally unique to cater to your own strategy and techniques. No two trading checklists are alike, which is why it becomes even more important than you know how to create one.

In this Toro Demo guide, we’ll tell you how to start with your very own personal trading checklist!

Why you should have a personal trading checklist

How much do you understand trading? Do you enjoy trading? Why do you trade?

Trading, like most other things out there, is something that can be both rewarding and risky at the same time. And the thing about this is, if the higher the reward, the higher the risks as well. With trading, the chance to win big may be high, but so is the chance to end up with literally zero in your pocket.

This is where a personal trading checklist comes into the picture. As mentioned above, it’s basically a plan that contains how you will tackle your trades in order to make the most out of them. Trading without a plan in mind is just like going to war without all your weapons. Hopefully, you get lucky, but it’s not very wise to leave it all to luck when you could’ve prepared beforehand, anyway.

In addition to this, it’s also there to help you mitigate the possible risks, both internal and external, that may accompany your trading career. Understanding and knowing how to deal with these factors are absolutely vital if you want to come out on top.

So, why should you have a personal trading checklist again?

1. Boosts your self-confidence

Trading can be a scary thing. I’ve been trading for over a decade now but there are still days that I feel afraid. What if the market doesn’t turn out the way I expected it to? What if I end up with a loss? What if?

It’s understandable to feel confused and scared when you’re doing something as risky as trading. But that’s why having a personal trading checklist is so helpful. When you’re feeling scared, nervous, or confused about your trades, you only have to take a glance at your trading checklist. If you created it properly, it should immediately answer the questions you have in mind. Or at the very least, it should provide you with the self-confidence and the peace of mind that you’re making the right decisions.

It may not seem like much, but believe me, when you’re on the verge of panicking because you don’t know what to do next, a personal trading checklist is a real lifesaver.

2. Serves as your trading guide

A personal trading checklist is also helpful if you’re unsure of your current trading strategy. I don’t mean just emotionally. After all, it’s not unusual to see trading checklists serve as a trading guide as well.

Remember, trading requires more things than just luck. Sure, you can always just blindly bet on whatever your heart is telling you to, but this is not exactly the preferred way of trading. Experienced traders will tell you that if you really want to increase your wins, you need to have a real, tried-and-tested strategy that works for you.

By keeping a trading checklist, you can keep yourself from straying from your chosen strategy. Even if the market goes against your favor, you’ll know not to act on emotion, since you have a trusted trading guide in your arsenal.

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Toro Demo Personal Day-Trading Checklist:

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Factors to consider when creating a trading checklist

Now that you know why it’s important to create a trading checklist, it’s time to actually create one. Again, it’s a personal thing so whatever your trading checklist contains depends entirely on you, but keep in mind that there are some factors that you should consider as well.

1. Market conditions

The first factor to consider when creating a trading checklist is the current market conditions when you’re trading.

After you define your market, that’s when you should decide if you would go in the same direction, or in the opposite. Understanding market conditions would be very helpful in this case, to help you know what the right decision is.

Personally, I recommend that beginner traders should never attempt to go against the market. It’s simply too risky, and you’ll have a better chance of coming out with winning trades if you “go with the flow of the market”.

2. Investment amount

Don’t forget to pay attention to your investment amount, right from the get-go. While investing a lot means that you could also gain a lot, the opposite is also true.

To put it simply: the more you invest, the more you could lose. By including your planned investment amount in your trading checklist, you can keep an eye on how much you want to earn from your trade. Eyes on the prize, so they say.

Once again, for best results: “Trade only in the right amounts.”

3. Trading-related news

As a trader, it’s your personal responsibility to stay updated on anything that’s related to your chosen instruments.

Remember, you’re never trading in a vacuum. Whatever is happening in the country, or even around the world, will affect your trades. If you don’t make it a habit to check trade-related or industry-related news, you won’t be able to trade effectively. That’s because you’ll be ignoring pretty much all the external factors that affects what happens in your trades.

It wouldn’t hurt to put this on your checklist: “Always stay updated on related news.”

4. Your personal well-being

Have you ever tried trading when you’re not feeling well?

No, scratch that. Have you ever tried doing anything when you’re not feeling well? Say you’re sick, tired, or broken-hearted. Do you think you can do anything with optimum efficacy? Based on my experience, not really. In fact, my worst trades happened during such moments.

This is why it’s important that your trading checklist includes good habits that you should adopt to prepare yourself mentally, emotionally, and even physically for trading.

5. Risk to Reward ratio

I already mentioned it here a couple of times, but the amount of reward you receive is generally equal to the amount of risk that you take.

Ideally, you would choose to partake in something that is low-risk, high-reward, but those opportunities come few and far in between. Usually, it’s low-risk, low-reward, and high-risk, high-reward. That’s why, if you want to earn high rewards, you have to be smart about it.

Determine in your trading checklist what’s the acceptable risk-reward ratio for you. Then, once you’re actually trading, don’t forget to keep this risk-reward ratio in mind and always stick to it. You might even want to set stop-loss orders for your picks to avoid losing.

As you can see, creating your very own personal trading checklist isn’t really very difficult. It may seem quite intimidating at first, but once you know what you need to include, you’ll have no issues at all. Again, keep in mind that what works for other may not work for you, and what didn’t work for others may be exactly what you’re looking for. If you’re interested in checking out more trading plans and strategies, you can look around the Toro Demo blog. And if you’ve got any questions, don’t hesitate to ask us in the comments!

Good luck trading with eToro!

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