Four questions before every trade

Friday, 16 October 2026, 09:45 ET (20:45 ICT). NQ opened at 30,024.25 and has fallen about 135 points in fifteen minutes. It is now 60 points above a price you wrote down last night. Your hand is on the mouse. Do you buy now, before it “gets away”? Do you wait for your price? If it gets there, where do you get out if you are wrong, and what does that cost in dollars? A trader who answers these questions at 09:45 answers them with feelings. This lesson gives you four questions you answer the night before, in numbers. If any answer is blank, there is no trade.

Key terms

Pre-trade checklist (danh sách kiểm tra trước lệnh): four questions answered in writing, in numbers, before an order is placed House rule. It is a house rule of this course, a process choice, not a claim about markets.

Invalidation (điểm vô hiệu): the price at which your idea is proven wrong, and where your stop-loss (dừng lỗ) sits Definition.

R (đơn vị rủi ro): the dollars you lose if the stop is hit. A target worth twice that is “2R”. R:R (tỷ lệ rủi ro/lợi nhuận) is reward divided by risk Definition.

Terms you need: Yesterday’s value area (vùng giá trị) is the price range where about 70% of yesterday’s regular-session volume traded; its lower edge is the VAL and its upper edge the VAH (M1.01). The overnight low (đáy phiên đêm) is the lowest price traded between 18:00 ET yesterday and 09:30 ET today. A limit order (lệnh giới hạn) waits to buy or sell at your chosen price or better; a bracket order (lệnh gộp) attaches both your stop-loss and take-profit orders to the entry automatically; one tick (bước giá) is 0.25 points on NQ and MNQ.

Chart first: the checklist as a gate

How it works

Q1: What is the market doing?

Describe the context in one sentence, with prices Context. For 16 October: “Yesterday’s session was wide, 29,622.50 to 30,196.75, and closed near its high at 30,140.75. Overnight held 29,959.25 to 30,225.00. We open at 30,024.25, inside yesterday’s value area of 29,829.50 to 30,196.75.” That sentence is a reading of where price sits, not a forecast. “Looks bullish” fails the question, because you cannot check it later.

Q1 also carries one rule: if the open is already beyond your level, the plan is off. You planned to buy a test of value from above, not a price that opened somewhere else.

Q2: Where exactly, and why there?

A price, not an area: “Buy limit 29,829.50, yesterday’s VAL.” The “why” names something the market did (yesterday’s volume left that edge), not something you hope. A limit order means you buy only at that price or better, so if price never comes, you are simply not in.

Be honest about what the level gives you. It gives you a fixed place to test an idea and to measure your risk from. Our lab found that pre-market levels as a group, prior value-area edges included, are respected no more often than random prices at the same distance Measured: no edgeNasdaq index. The level is a ruler, not an edge.

Q3: Where am I wrong?

“Invalid below 29,799.50”, 30 points under the entry House rule. If price trades 30 points back under value, the idea that value holds has failed. You decide this before entry, because after entry you are no longer neutral. A stop is not pessimism; it is the price you agreed to pay to find out.

Q4: What does it cost, and is the reward worth it?

Risk $ = stop distance in points × dollars per point × contracts Definition. On 1 MNQ ($2 a point, M0.05): 30 × $2 = $60. The target at 29,879.50 is 50 points away: $100. R:R = 100 ÷ 60 = 1.67.

Now add costs. M0.01 used about $2.50 per MNQ round trip. Risk becomes $62.50, reward $97.50, and R:R after costs is 1.56. The break-even win rate is risk ÷ (risk + reward) = 62.5 ÷ 160 = 39% Definition. You must win more than 39% of these trades just to stand still. The house minimum in this course is 1.5R after costs House rule; RSK1.01 shows how to set your own from your measured win rate.

What the data says

Worked example: the long plan on 16 October

The four answers, written before the open:

1. Context: inside yesterday’s value after a wide day; skip if the open is below 29,829.50.
2. Level: buy limit 29,829.50 (yesterday’s VAL), 1 MNQ.
3. Wrong at: 29,799.50.
4. Risk $60, reward $100 at 29,879.50, 1.56R after costs.

At 09:35 ET price broke the overnight low. At 09:51:30 (20:51 ICT) it traded through 29,829.50 and the order filled. At 09:52:35 price printed 29,803.50, four points from the stop. This is the moment the checklist exists for: the trade feels wrong, and every instinct says close it or “give it room”. The written stop stayed where it was. At 09:55:12 the target traded: +50 points, +$100 before costs.

Do not learn the wrong lesson from this. The trade won; the checklist did not make it win. It made the loss, had it come, exactly $60.

The mirror and the failure

The mirror. The short plan that day was the same four questions upside down: sell 30,196.75 at yesterday’s VAH, wrong above 30,226.75, target 30,146.75. The session high was 30,045.75, so the order never filled. No trade, no loss, no story. In our 59-session count, 46 of the 75 plans still on at the open were never reached. Missing calmly is the checklist’s most common outcome.

The failure. Wednesday 23 September 2026: the same plan bought yesterday’s VAL at 30,888.00, filled at 09:46:08 ET, and was stopped at 30,858.00 at 09:51:35. Loss: $60 plus costs. Price kept falling to a session low of 30,642.75, 245.25 points under the entry. A trader with no Q3, holding 1 MNQ to that low, was down $490.50 on a “$60 idea”. Q3 cannot stop you being wrong. It stops being wrong from costing more than you agreed.

Do it on the platform

Prop-firm note. On an evaluation account, a daily loss limit is a firm rule that caps how many $60 answers you can lose in one day. The PROP course shows each rule with its dated card. Also note that a simulated limit order may fill when price only touches it; our counts above required a trade at or through the price (MKT2.03 covers sim fills).

Common mistakes

Common mistake: widening the stop after the fill. At 09:52 on 16 October, moving the stop from 29,799.50 to 29,780.00 “for room” would have turned a $60 risk into $99 and R:R from 1.67 into 1.01, with no new information. The market did not change the trade; you did.

Common mistake: treating one winning day as proof that the level works. 16 October hit its target; the same plan lost on 20 of 29 fills in our sample, and pre-market levels as a group score at the placebo rate. A result is a sample of one until you count all the days.

Drill: run the gate on a real session

Tuesday 3 November 2026. Yesterday’s regular-session value area was 28,101.75 to 28,691.00. NQ opens at 28,266.00 (09:30 ET, 21:30 ICT). Your plans: buy 2 MNQ at the VAL, sell 2 MNQ at the VAH, each with a 30-point stop and a 50-point target.

1. Write Q1 in one sentence.
2. Compute Q4 for one plan: risk $, reward $ and R:R before costs.
3. The session traded 28,215.75 to 28,443.50. Which plans filled?

What we don’t know yet

• Whether a written pre-trade checklist raises traders’ profits, rather than plan-following: not yet measured.
• Whether this lesson’s VAL/VAH plan has any edge on NQ: 29 fills cannot tell; the lab’s larger level test says the levels alone do not.

Recap

• Four answers, in numbers, before the order: context in one sentence, an exact price and why, the invalidation price, and risk and reward in dollars after costs.
• A blank answer means no trade, and a plan whose open is already beyond the level is off.
• The stop from Q3 is fixed once you are filled; widening it changes Q4 without a new check.
• The checklist sets your cost and lets you miss calmly. It does not give a level better odds.

Further reading

• Gollwitzer, P. M. and Sheeran, P. (2006), “Implementation intentions and goal achievement: a meta-analysis”, Advances in Experimental Social Psychology 38.
• Haynes, A. B. et al. (2009), “A surgical safety checklist to reduce morbidity and mortality in a global population”, New England Journal of Medicine 360.
• CME Group, Micro E-mini Nasdaq-100 contract specifications.
• Our lab: pre-market level families against a distance-matched placebo (721 sessions, 27,464 levels), and this lesson’s VAL/VAH plan counted on 59 NQ sessions of tick data.

Prerequisite: M0.03 (limit and stop orders) and M0.05 (dollars per point for each contract). Next: M0.07, choosing software and data, because your four answers are only as good as the prices and volume your platform shows you.

Educational content only. Not financial advice. Futures trading involves substantial risk of loss. Not affiliated with Topstep; firm rules change; check the Topstep help center.