> ## Documentation Index
> Fetch the complete documentation index at: https://www.questforedge.io/llms.txt
> Use this file to discover all available pages before exploring further.

# Prop Firm Risk Management Checklist

> A practical pre-session, pre-trade, live-risk, and post-session checklist for prop traders managing drawdown rules.

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.

## 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.

## 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.

## 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.

## 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.

## 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.

<CardGroup cols={2}>
  <Card title="Prop risk framework" icon="shield-halved" href="/system/prop-trading/prop-firm-risk-management">
    Understand the logic behind each check.
  </Card>

  <Card title="Daily vs maximum loss" icon="gauge-high" href="/system/prop-trading/daily-loss-limit-vs-maximum-loss">
    Verify which rule constrains the next trade.
  </Card>

  <Card title="Build a risk-based system" icon="screwdriver-wrench" href="/system/practical-implementation/how-to-build-a-risk-based-trading-system">
    Connect limits, execution, and review.
  </Card>

  <Card title="Automate enforcement" icon="shield-heart" href="/tools">
    Explore tools for monitoring limits continuously.
  </Card>
</CardGroup>

<Note>
  A checklist supports discipline but cannot remove market, liquidity, platform, configuration, or counterparty risk.
</Note>