The risk-first checklist before any market view

State the thesis

Write what must happen for the view to remain valid and what observation would disprove it. If invalidation cannot be stated, the idea is not ready.

Size from risk

Set the maximum acceptable loss before entry, then calculate size from distance to invalidation. Do not move invalidation merely to preserve a losing view.

Review process, not outcome

A profitable trade can be poorly executed and a controlled loss can follow a sound process. Record the decision, catalyst, execution and deviation from plan.

Make the instrument explicit

A market name is not a contract specification. A cash index, a broker’s CFD, a futures contract and an exchange-traded fund may refer to related exposures while differing in fees, hours, financing, expiry and settlement. Record the exact instrument and venue before applying a framework. The chart provider’s symbol is a useful identifier, but it does not replace the execution venue’s specification.

A numerical example of planned and realised loss

Consider a hypothetical position of ten units with a planned exit five currency units away. Ignoring fees, the planned price-distance loss is ten multiplied by five, or fifty. If the actual exit is eight units away after a gap, the corresponding loss is eighty before fees. This is arithmetic for education, not a position-size recommendation.

The distinction is between a planning assumption and the price that can actually be obtained. Leverage, conversion rates, commissions and financing can add complexity. A stop instruction is not a promise of a particular fill. Test the arithmetic against the actual contract’s unit value rather than applying an example mechanically.

Write the reason to stop the research

Define invalidation as an observation that would contradict the hypothesis. This differs from a stop order, which is an instruction to a venue. Also record conditions that make the data unusable: a stale feed, missing contract details, an unverified announcement or a venue outage. It is reasonable for a research note to end with insufficient evidence.

Use a reviewable note

A concise note can contain: instrument and timestamp; observations and primary sources; hypothesis and alternative; event and liquidity context; missing information; and a later review. Keep the original observations when reviewing the outcome so hindsight does not silently rewrite the initial explanation.

For a loss review, distinguish price movement, execution, fees and errors in the research process. A profitable outcome does not validate an unsupported method, and a losing outcome alone does not identify which assumption failed. This public checklist is not a mandate, personal risk assessment or assurance of performance.