Checklists can save your life.
Literally.
Anesthesiologist Peter Provonost studied how 100 Michigan hospitals inserted central lines (also known as intravenous tubing) into patients’ chests.
Central lines deliver lifesaving medications, and proper installation is critical for avoiding life-threatening infections.
30% of the time, surgical teams skipped 1 of 5 essential steps in the process.
But by using a simple checklist, the infection went from 4% to zero, saving 1,500 lives and nearly $200 million.
That’s not all.
Checklists keep planes in the air.
Checklists keep nuclear power plants operating safely.
And checklists can keep traders like you avoid simple errors that can cost you money.
Here’s a simple checklist you can use to avoid errors when they’re most likely — the order entry process.
Before we get to the checklist, make sure your trading platform is set up in a way that works for you.
For example, many trading platforms let you set defaults for trade parameters including share size.
You can also often set little things like how your mouse interacts with the platform.
Depending on your settings, you could even place orders with a single mouse click.
And set your chart time frames in a way that corresponds to your actual trading. Since all platforms allow you to save your screen layouts, keep yours saved so you can always go back to square one.
So take a half hour and go through your platform’s default settings.
This will reduce the risk of placing accidental orders, or of accidentally looking at the wrong charts.
Now let’s take a look at an actual order entry checklist that can prevent you from making errors:
Step 1: Ask Yourself If You Have a Good Reason for Making This Trade
Since they’re constantly bombarded with news, data, and ideas, traders are always tempted to act impulsively.
You can counteract this tendency by asking yourself: do I have a good reason for doing what I’m about to do?
Often, that will be enough to stop you from getting in bad trades.
Continue reading on T3 Live.