Pre-Trade Checklist: Entry, Stop, Target, Position Size

A pre-trade checklist should stop one specific mistake:

Entering a trade before the risk is fully defined.

Most trading errors are not mysterious. The investor had an idea, but not a complete plan.

1. Entry

The entry is the price area where the trade becomes active.

It should be specific enough to evaluate. "I like the stock" is not an entry. "I will consider it near $42 if the setup holds" is closer.

2. Stop

The stop defines where the trade idea is wrong.

It should not be chosen only to make the share count larger. If the stop is too tight for normal movement, the trade may fail for noise rather than thesis.

3. Target

The target defines what the trade is trying to capture.

It does not have to be perfect, but it should make the risk-reward structure visible. If the target is too close, the setup may not deserve risk.

4. Position size

Position size connects the plan to the account.

Use the formula:

Position size = risk per trade / risk per share

Without this step, the entry, stop, and target are only a sketch. The account risk is still unknown.

5. Expected loss

Expected loss is the planned dollar loss if the stop is reached.

This is the number that should be accepted before the order.

If the expected loss feels too high, reduce the position, change the plan, or skip the trade.

6. Reason to do nothing

Every checklist should include a reason not to trade.

Examples:

• The stop is too wide for the account.
• The target is not worth the risk.
• The setup depends on a headline instead of structure.
• The position size is too small to matter after proper risk control.

Doing nothing is a valid output.

Use the checklist before execution

ZISO's research workflow is built around this sequence: research, define levels, calculate risk, then decide.

The Position Size Calculator handles the risk translation step, turning entry, stop, target, and account risk into a usable share count and expected loss.

Use the calculator here:

• ZISO Position Size Calculator

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ZISO AI: AI does the research. You keep the decision.