How a Trade Moves from Research to Post-Trade Review

1. Research the decision before planning the trade

Begin with a written thesis, the evidence supporting it, the conditions that would weaken it, and a review date. Bear, base, and bull scenarios are user assumptions rather than predicted prices.

• Separate reported facts from estimates and personal assumptions.
• Record the catalyst or evidence change that would require another review.
• Check portfolio exposure before treating an attractive company as an attractive trade.

2. Define the plan and its initial risk

A plan records the intended entry, structural stop, number of shares, targets, management rules, and review triggers. For a long stock position, initial risk per share is entry price minus the initial stop. Planned dollar risk is that distance multiplied by planned shares.

R is a reference unit based on that original planned risk. Moving a stop later does not rewrite the initial risk used to review the completed trade.

3. Record what actually happened

The actual fill can differ from the planned entry. MSPT preserves the plan and records actual execution separately so slippage or a changed entry does not disappear from the review. Partial sales remain part of the same position cycle.

• Link or record entry and exit fills rather than replacing the original plan.
• Document why a stop, target, or quantity changed.
• Treat alerts as review prompts; a signal alone does not decide the action.

Plan staged exits with an exit ladder

An exit ladder records intended price levels and share quantities before the position reaches them. It can pair partial reductions with documented stop-management rules, so the investor can compare the eventual fills with the original plan instead of reconstructing the decision later.

In MSPT's current public product, broker execution is paper trading only. A submitted, changed, cancelled, or filled paper order still needs broker confirmation before MSPT treats the corresponding execution as evidence. An alert or crossed price level by itself is not proof of a fill.

Each confirmed partial exit reduces the shares and market exposure still open in that position. It also reduces the position's contribution to current portfolio heat. A full confirmed exit removes that position's open trade risk, but the portfolio can still carry risk from other holdings. A planned or submitted exit does not reduce these measures until execution evidence is available.

• Specify the quantity intended for each exit level and ensure the total does not exceed the open position.
• Record the reason and effective price whenever a protective stop changes.
• Reconcile broker-reported order and fill status before closing the related action item.
• Combine all partial exits when calculating the completed position's realized P/L and R.

Worked example: one position from plan to review

Assume a hypothetical long plan with a $50 entry, a $46 initial stop, and 100 shares. Initial risk is $4 per share and $400 for the position. The $54, $58, and $62 price levels correspond to +1R, +2R, and +3R before costs.

Suppose 50 shares are sold at $58 and the remaining 50 are sold at $54. The first sale realizes $400 and the second realizes $200, for $600 total before fees. Dividing $600 by the original $400 risk gives +1.5R for the completed position. Selling part of the position at +2R did not make the entire result +2R.

The review should also ask whether the thesis, entry, risk, and exits followed the written plan. A profitable result can come from a poor process, and a planned loss can still reflect disciplined execution.

Important limitations

• Stops do not guarantee an execution price; gaps, liquidity, and order handling can change the result.
• Fees, taxes, dividends, foreign exchange, and unrecorded fills can make a simplified example differ from an account statement.
• Options and other instruments need instrument-specific payoff and risk treatment.
• R describes a result relative to recorded initial risk; it does not predict the next trade.