Discipline: the rules you do not break
What you learn in 3 minutesThis lesson is about the written routine that stays the same every day: a short checklist before you open a chart, a few rules while the session is running, and a review after you close it. The routine matters in money terms because one unplanned trade on EUR/USD can cost more than a week of planned ones. A single pip on one standard lot is 10 units of the quote currency, so a 20 pip mistake on 0.10 lots is 20 x 1 = ₱20 before any broker costs, and that number is the reason the rules exist.
A five-item checklist and what one bad trade costs
| Step | Amount | Note |
|---|---|---|
| 1. Direction written down | EUR/USD, around 1.0850 | the instrument and the level are fixed before the chart is opened |
| 2. Risk in pesos per trade | ₱200 | a fixed amount chosen in advance, not a percentage invented on the day |
| 3. Stop distance in pips | 20 pips | read from the chart, not guessed |
| 4. Position size from the two figures above | 0.10 lots | 20 pips x 1 per pip on 0.10 lots = ₱20; ₱200 divided by ₱20 = 10, so 0.10 lots |
| 5. Time to stop for the day | after two losing trades | written before the session, not after the second loss |
The broker may round the position size, charge a spread and a commission, and quote a slightly different price at the moment the order fills, so the final cost can be a little higher or lower than the figures above.
The mistake people make here
The common mistake is to treat the checklist as a warm-up that can be skipped once the chart looks obvious. People then move the stop, add to a losing position, or take a third trade after two losses, and the day's cost stops matching the plan. Write the five items down before the session and read them again before every order. If an item cannot be filled in with a real number, the trade is not ready.Check yourself
One pip on one standard lot of EUR/USD is 10 units of the quote currency. If you trade 0.10 lots with a 20 pip stop, what is the loss in units of the quote currency before broker costs?
20 pips x 1 per pip = 20 units of the quote currency, which is ₱20 at the rate used here.
Using the same 0.10 lots and 20 pip stop, how many trades of that size fit inside a ₱200 daily risk limit?
₱200 divided by ₱20 = 10 trades, but the checklist sets a stop after two losing trades, so the limit is not the same as the number of trades allowed.