Building a Price Action Checklist

Why a Checklist?

Emotions compromise judgment. Under the pressure of a live market, traders take entries they should not take, exit early from winners, and hold losing trades too long. A pre-defined checklist removes the in-the-moment decision and replaces it with a prior commitment to a standard.

The Six-Point Price Action Checklist

1. Higher Timeframe Bias: What is the dominant trend on the daily or H4 chart? Am I looking to trade with or against it? (Ideally: with it.)
2. Key Level: Is there a clear, well-defined support or resistance level nearby? Is price at or approaching it?
3. Price Action Signal: Has a valid candlestick pattern (engulfing, pin bar, inside bar, rejection candle) formed at the key level?
4. Confluence: Is there additional confluence? (Fibonacci retracement, session timing, trend direction alignment, volume confirmation)
5. Risk/Reward: What is my stop placement? What is my target? Is the R:R ratio at least 1:2?
6. Position Size: Given my stop distance and account balance, what lot size keeps my risk at or below 1-2% of account?

The Role of Patience

A checklist naturally filters out most potential trades — because most potential trades do not meet all criteria. This is a feature, not a bug. Professional traders are paid for waiting. The highest win-rate traders take the fewest trades.

Your edge is not in your indicator settings. It is in your ability to wait for your setup and execute your plan.