Putting it together: the confluence checklist & trade plan
Pilots do not take off on a feeling. They run a checklist. Traders who last do the same.
Analyst · 11 min · Updated 2026-11-08
💡 A pilot's pre-flight checklist
Even a pilot with 20,000 hours reads the checklist before every flight: fuel, flaps, weather, route, alternate airport. Not because they forgot — because checklists stop experienced people from making silly, expensive mistakes. A trade plan is your pre-flight checklist, and the stop-loss is your alternate airport.
The 7-step confluence checklist
| # | Question | Tool |
|---|---|---|
| 1 | What is the higher-timeframe trend? | Weekly/daily structure, 200-day average |
| 2 | Where are the key zones? | Support/resistance, round numbers, Fibonacci |
| 3 | Is price at a zone right now — or in the middle of nowhere? | Distance to nearest level |
| 4 | Is there a trigger? | Candle pattern, breakout close, retest |
| 5 | Does momentum agree? | RSI, MACD, divergence |
| 6 | Does volume confirm? | Volume vs average, OBV |
| 7 | Where am I wrong, and is the reward worth it? | Stop beyond structure; R:R ≥ 1:2 |
If steps 1–3 are not in your favour, stop. Steps 4–6 only refine timing. Step 7 decides whether the trade is worth taking at all.
Writing the plan
- Setup: what you see, in one sentence ("daily uptrend, pullback to old resistance, 4h hammer").
- Entry: the exact condition ("4h close above $3,050").
- Stop (invalidation): where the idea is wrong ("4h close below $2,940").
- Target(s): the next zone, maybe partial profits.
- Size: from your risk budget:
units = (account × risk%) ÷ (entry − stop). - Leverage: none, or at most 3× with a small position — never more.
- What would make me cancel: news, a gap, a failed breakout.
Managing the trade
- Never widen a stop. You may tighten it as the trade moves in your favour.
- Consider taking partial profit at the first target and trailing the rest under new higher lows.
- If the trigger does not happen, there is no trade. Missing a move costs nothing.
Review: the journal closes the loop
After each paper or real trade, record the plan, the outcome, and whether you followed the plan. Over 30–50 trades, your journal will show which setups actually work for you — and which mistakes cost the most.
🧮 Practical example: a complete written plan
Key takeaways
- Trend → level → location first; trigger, momentum, volume refine timing.
- Every plan has entry, stop, target, size, leverage cap and cancel rule.
- R:R of at least 1:2 lets you be wrong often and still survive.
- Journal every trade to learn what works for you.
Education only — not financial advice.