Why document a risk plan
Documenting risk before entry makes review data more reliable. It also gives you a baseline to compare planned versus actual execution during the weekly review.
Pre-trade checklist
- Max loss defined. Write the maximum loss for the trade in currency and percent terms.
- Position size set. Confirm contracts and notional exposure align with your risk limit.
- Exit triggers stated. Specify profit targets, time-based exits, and invalidation points.
- Adjustment rules noted. If you plan to roll, scale, or hedge, document the conditions.
- Event risks captured. Note earnings, macro events, or expirations that could change volatility.
Suggested journal fields
| Field | Purpose | Example |
|---|---|---|
| Max loss | Sets the worst-case exposure | $250 or 1% of account |
| Position size | Translates risk into contracts | 2 contracts, 1 spread |
| Exit triggers | Defines decision points | 50% profit, 2 weeks to expiry |
| Adjustment plan | Pre-commits to changes | Roll up if delta exceeds target |
| Event notes | Flags known catalysts | Earnings in 9 days |
How to review the plan later
During review, compare planned versus actual decisions. If a trade deviated from the plan, add a note in your journal and tag it for follow-up in the performance review.
Consistency tip: Use the same risk plan template for every trade so you can compare process outcomes across weeks.
Related guides
Pair this checklist with trade tracking workflow and tags and notes structure.
FAQ
Do I need a different plan for each strategy?
The checklist stays the same, but the exit triggers and adjustment rules should reflect the strategy type.
Should I update the plan after entry?
If conditions change, note the reason and update the plan so the review captures why the change happened.