Check every statement that's true about this specific position, right now, before you add to it.
Your Result
Check the statements that apply to this position and click Check My Red Flags to see your read.
How this is calculated
Each checked statement adds one point, out of 8 possible.
A checked stop-loss, the first statement, is the single biggest red flag on this list. Adding size below a level you already decided was wrong moves the goalposts after the fact.
A score of 0 to 2 suggests this may be a defensible add if it was part of your original plan and your thesis is still intact, though it still needs to fit your position-size and loss-limit rules.
A score of 3 to 5 suggests this looks more like chasing a loser than following a plan. Revisit your original thesis before adding.
A score of 6 to 8 suggests strong red flags, the classic signature of doubling down to avoid admitting a loss rather than a planned add.
Averaging down can be a legitimate part of a strategy when it's scaled into at predetermined levels chosen before entry. The difference this checklist looks for is whether the add was planned in advance, or is a reaction to the trade going against you.
Risk & liability disclaimer: This tool is an educational self-reflection resource only. It is not financial or psychological advice, and it does not predict your trading outcomes or guarantee any result. Trading involves risk of loss. Trading Habits is not a broker-dealer, registered investment adviser, or mental health professional, and is not affiliated with any broker, exchange, or data provider. Always verify results independently and consult a licensed professional before making any trading or financial decision.
Don't Let One Loss Become a Bigger One
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