r/options
My 15-point GO/NO-GO checklist before any options trade, because I kept breaking my own rules
Author shares a strict 15-point checklist for options trading focusing on discipline, technicals, and risk management to avoid emotional mistakes.
Most of my losing trades had one thing in common: I knew better and entered anyway. Revenge entries, oversizing after a win streak, buying breakouts in chop. The strategy was fine. The discipline was not.
So I turned my rules into a hard GO/NO-GO checklist. If any point fails, no trade. No exceptions, no "but this setup is special." It is boring and it works. Here is the full thing in case it helps someone else stop donating money to the market.
Phase 1: Environment. 1) Fed policy: no active hiking cycle paired with rising VIX. 2) VIX under 25, or the strategy is defined-risk. 3) SPY vs the 200 MA matches my trade direction.
Phase 2: Technical confluence. 4) RSI(14) supports the thesis. 5) MACD crossover confirms. 6) 50/200 MA alignment agrees. 7) Entry sits at a real support/resistance level, not no-man's land. 8) Volume above average on breakouts, light on pullbacks.
Phase 3: Probability and positioning. 9) At least 3 of 5 independent probability models agree. 10) Smart money check: no heavy insider selling, institutional flow neutral or better. 11) Price at a Bollinger band or a confirmed breakout, not mid-range drift.
Phase 4: Sizing and risk. 12) Positive expected value, size capped at half-Kelly. 13) ATR-based stop with max loss 2% of portfolio.
Phase 5: Execution. 14) Limit order anchored at support, never market orders on entry. 15) Greeks sanity check: delta, DTE, IV percentile all in range.
How I use it: print it, physically check the boxes before entry. The checklist's job is not to find trades, it is to kill bad ones. It will make you miss some runners. That is the price, and it is cheaper than the alternative.
Not advice, just my process. Happy to answer questions about any checkpoint.
What symbols are you primarily using this against? How many trades on avg/day?
I tend to skim the 52-week lows. But, I've been eyeing ADBE & CRM. I'm just waiting for the FOMC for this week to get a better picture
Thank you. I'm going to steal some of this and add to my own risk management list.
Glad it's helpful
This is a solid check list
Thank you!
VIX over 25, you can consider shorting volatility
I'll give it a shot at paper trading. See if it checks out
Discipline is extremely important.
These are indicators and not predictions. You want all of your indicators pointing in the right direction to stack the odds in your favor. As you note, it is better to miss a good trade than to make a bad one.
The best metaphor that I've heard regarding this is the baseball analogy. You don't need to go for the home run. Wait for the pitch that you know then strike when the setup is right
good post. the part about taking it step by step is underrated advice.
Solid framework, and the honest part is admitting the strategy was never the problem. One gap worth closing: every point here gates the entry, but the losses you described (revenge, oversizing after a win streak) happen after you are already in. A gate that only fires before the trade does not touch the part of the process that actually breaks. Worth running a parallel pass/fail on sizing and on the exit, with the size rule keyed to the prior trade outcome since that is exactly when discipline slips. On the VIX under 25 line, the level alone is a blunt read. Term structure tells you more: contango means you are being paid for carry, backwardation means you are being paid for fear, and selling premium into steep backwardation is a different trade than the number 25 suggests.