Most day trading risk management advice stops at the entry. You pick a stop, size the position and place the order. This article covers the other half: after the trade, check whether the loss you planned was the loss you took.
On fast-moving stocks, planned and realized risk can differ because of slippage, fees, gaps, halts and decisions made during the trade. A short post-trade review helps identify where that difference came from.
Why review risk after the trade?
A trade can follow the plan and still lose more than expected. If planned risk was $50 and the realized loss was $75, record both the planned loss and the additional $25. This can help you distinguish between an unrealistic plan, execution costs, and moves that carry price beyond a stop.
Record four numbers before entry
- Planned entry price
- Planned stop price
- Share count
- Planned dollar risk: (planned entry − planned stop) × shares
Hypothetical arithmetic, not a recommended amount: with a $50 risk budget, a $5.00 planned entry and a $4.85 stop, the distance is $0.15. $50 ÷ $0.15 = 333.3, rounded down to 333 shares. Planned risk is 333 × $0.15 = $49.95. See Lesson 11 on position sizing and stops for the broader method.
Measure the result in R
Planned-risk R is net P&L divided by the dollar risk recorded before entry. Recorded-risk R is net P&L divided by the risk calculated from the entry actually logged to the stop. Those measures answer different questions; label them and compare like with like. The free Greenwick template currently calculates its R from the logged entry-to-stop risk. See Lesson 35 on measuring trades in R.
A hypothetical example: where the difference came from
Suppose the average fill is $5.02, two cents above the planned $5.00 entry, the $4.85 stop fills at $4.80, and fees total $2.00.
| Component | Calculation | Amount |
|---|---|---|
| Planned risk | 333 × ($5.00 − $4.85) | $49.95 |
| Entry slippage | 333 × $0.02 | $6.66 |
| Exit slippage | 333 × $0.05 | $16.65 |
| Fees | Broker statement | $2.00 |
| Realized loss | 333 × ($5.02 − $4.80) + $2 | $75.26 |
Planned-risk R is −$75.26 ÷ $49.95 ≈ −1.51R. Recorded-risk R uses the $5.02 fill: 333 × ($5.02 − $4.85) = $56.61, so −$75.26 ÷ $56.61 ≈ −1.33R. All figures are hypothetical.
Common sources of extra loss
Entry slippage: paying more than planned increases the distance to the stop. Exit slippage: a stop order may execute at an unexpected price; a stop-limit may not execute at all. The SEC’s stop-order bulletin explains this trade-off. Lesson 12 compares order types.
Gaps and halts: trading may pause, and the price after resumption can differ from the stop level. See FINRA’s trading halt overview and Lesson 14. Fees: include costs consistently in your results; see Lesson 34 on fills and fees. Decisions: moved stops, added shares and size errors can be tagged; Lesson 38 covers mistake tags. These are common contributors, not an exhaustive list.
Post-trade risk review checklist
- Record the planned entry, stop, share count and planned dollar risk.
- Log actual average entry and exit, plus fees.
- Calculate planned-risk R separately from any journal’s recorded-risk R.
- If planned-risk R is worse than −1R, estimate slippage, gap, fee and decision contributions; leave any remainder as other or unexplained.
- Tag the main cause and confirm share count matched the plan.
- Write one sentence: was the extra risk something you chose, or something the market did?
This fits into the five-minute daily recap and adds a cost breakdown to the risk note.
Look for patterns weekly
Group your tags in a weekly review. Ask whether entry slippage is routine, whether exits gap in particular conditions, and how much fees take from planned risk. Avoid drawing conclusions from a handful of trades; Lesson 46 explains sample size. A review does not make trades profitable; it helps you identify where actual outcomes differ from the plan.
Log the numbers in a journal
The free Greenwick trading journal template records entry, exit, stop, shares and fees and calculates net P&L and R. Its R is the recorded-risk measure, based on logged entry-to-stop risk. It does not store planned entry or planned dollar risk, so it cannot calculate planned-risk R by itself. To track that measure, record planned entry or planned dollar risk separately and divide net P&L by it.
FAQ
What is a good maximum loss per trade? There is no universal number. It depends on a trader’s circumstances; Lesson 11 discusses the decision without prescribing a figure.
Does a stop-loss guarantee my maximum loss? No. A stop can fill at a worse price; a stop-limit can fail to fill, and gaps or halts may move price past a stop.
Should R include fees? Either convention can be used if it is applied consistently. Including fees shows more of the trade’s cost.
How often should I review risk? Record the details the same day and look for patterns weekly once there are enough trades to compare.
Why does my journal’s R differ from planned R? A journal may use actual logged entry-to-stop risk. If the fill differs from the planned entry, recorded-risk R and planned-risk R will differ.
Educational content only; not financial advice. Day trading is high risk. All figures in this example are hypothetical.