# PipCairn Forex Risk Starter Kit

*A concise, general-information handout for retail forex traders*

**How to use this kit**

Read this before entering a trade. Use the prompts to make potential losses and
exposure easier to think through, then keep the completed worksheet with your
own records.

**Important:** This material is for general information and education only. It
is not personalized financial, investment, or trading advice. It does not take
account of your circumstances, objectives, or risk tolerance. It makes no
promise or guarantee about results, profits, or future performance. Forex
trading can result in losses, including losses that may be larger than expected
when leverage, gaps, slippage, or fast markets are involved.

## 1. Start here: educational scope

- A risk plan is a way to state assumptions and possible losses before a trade;
  it is not a signal, strategy, or recommendation.
- A stop order may not fill at the exact level expected in a gap or fast market.
  Spread changes, slippage, commissions, swaps, and liquidity can affect the
  result.
- Check your broker's current contract specifications, costs, margin rules,
  and risk disclosures. If something is unknown, mark it as unknown rather than
  guessing.

## 2. Pre-trade risk checklist

Use these as prompts before each trade. A checked box is not an approval or a
prediction; it only records what you considered.

- [ ] I have written the instrument or currency pair and direction.
- [ ] I have recorded the planned entry level and the condition that would
      show the idea is no longer valid.
- [ ] I have recorded a planned stop or other loss-limiting exit and its
      distance from entry.
- [ ] I know the planned position size or units, and I have checked the
      broker's pip/point value for that instrument.
- [ ] I have estimated the price-move loss in my account currency.
- [ ] I have considered spread, commission, swap/financing, slippage, and the
      possibility of a gap.
- [ ] I have compared this trade's potential loss with the risk boundary I
      set in my own written plan.
- [ ] I have considered other open positions and exposures that could move in
      a similar way.
- [ ] I know which information is missing, and I know what would make me
      cancel, reduce, or postpone the trade under my own rules.
- [ ] I am not increasing size just to recover a previous loss or because of
      fear of missing out.

## 3. Risk-planning worksheet

Complete what you can before entry. Use your broker's contract details and
round conservatively where your own process requires it.

**Trade record**

- Date/time: ________________________________________________
- Instrument or pair: _______________________________________
- Direction: ________________________________________________
- Planned entry: ____________________________________________
- Planned stop or invalidation level: ________________________
- Stop distance (pips/points): _______________________________
- Planned position size/units: _______________________________
- Pip/point value in account currency: _______________________

**Potential-loss estimate**

- Estimated price-move loss: ________________________________
- Estimated spread and commission: __________________________
- Estimated swap/financing or other costs: __________________
- Allowance for slippage or a gap: __________________________
- Total potential-loss estimate: ____________________________

One general way to organize the estimate is:

```text
price-move loss ≈ stop distance × position's pip/point value
total potential-loss estimate ≈ price-move loss + costs + slippage/gap allowance
```

This is a planning aid, not an exact result or a recommendation to use any
particular position size or percentage. Confirm the actual calculation with
your broker's specifications.

**Exposure questions**

- Account currency and current equity/balance reference: _____________
- My written risk boundary for this trade: __________________________
- Other open or planned positions with related exposure: _____________
- What could happen if the exit is filled worse than planned? ________
- What important fact or cost is still unknown? ______________________
- What would make me skip, reduce, or postpone this trade? __________

**Decision note**

In one sentence, what am I willing to lose under this plan, and what would I
do if the uncertainty is greater than I can accept?

________________________________________________________________________

________________________________________________________________________

## 4. After-trade review

Review the process without treating one outcome as proof of future results.

- Did I record the planned risk before entering?
- Did the entry, size, costs, or exit differ from the worksheet?
- Did I move, widen, or remove the planned loss limit? If so, what happened?
- Which assumption was uncertain, and what information would clarify it next
  time?
- What process note should I carry into my next review?

**Final reminder**

This starter kit is general educational information only. It is not
personalized financial, investment, or trading advice, and it does not promise
or guarantee any performance or outcome. Consider whether forex trading is
appropriate for you and seek independent professional advice if you need help
with your personal circumstances.

— PipCairn