Prop Firm Risk Management Checklist

Use this checklist to translate prop-firm rules into daily operating decisions. Adapt the numbers and controls to the current terms of your account and to the tested behavior of your strategy.

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Before the session

• Confirm the firm’s current daily-loss and maximum-loss calculations.
• Record the reset time and time zone.
• Calculate the current distance to both breach thresholds.
• Set a personal daily stop inside the firm’s hard limit.
• Reserve capacity for commissions, slippage, gaps, and operational error.
• Review scheduled news and product restrictions.
• Confirm platform, data, VPS, and notification status.
• Define the maximum total open risk and maximum risk per trade idea.

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Before each trade

• State the setup and invalidation point.
• Calculate size from allowed monetary risk and stop distance.
• Include commissions and a realistic slippage allowance.
• Check symbol, direction, sector, currency, and strategy exposure.
• Group related positions under one trade-idea budget.
• Include pending orders that could activate together.
• Verify remaining daily and overall loss capacity after entry.
• Reject the trade if any limit would be exceeded.

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While positions are open

• Monitor equity and open risk, not only closed P&L.
• Recalculate aggregate exposure after fills, partial closes, or stop changes.
• Do not widen an invalidation point to avoid realizing a loss.
• Do not increase size to recover the day.
• Confirm that automated controls remain active.
• Stop opening risk at the personal daily boundary.

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After the session

• Reconcile platform results with the firm’s dashboard.
• Record sizing errors, overrides, rejected orders, and technical incidents.
• Separate strategy performance from execution quality.
• Review the largest correlated exposure of the day.
• Confirm the next session’s available loss buffer.
• Change limits only during a scheduled review, not in response to frustration.

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Weekly review

Track process metrics as well as return:

• percentage of trades sized correctly;
• number of rule exceptions;
• maximum concurrent open risk;
• largest trade-idea concentration;
• slippage versus assumptions;
• distance between the personal stop and the hard breach threshold;
• days on which trading continued after the planned stop.

A profitable week with repeated control failures is not evidence of a robust process.