Which is NOT a component of a risk control plan in trading?

The focus on monitoring emotional states is more aligned with psychological aspects of trading rather than the structural components of a risk control plan. A risk control plan is primarily concerned with developing systematic strategies to manage financial risk in trading.

Setting stop-loss orders, for instance, is a direct method to limit potential losses on trades. By specifying the maximum loss that is acceptable before exiting a trade, traders can protect their capital. Defining a maximum loss per trade complements this by establishing guidelines that ensure no single trade can result in devastating losses.

Diversifying trading instruments also plays a crucial role in risk management. By spreading investments across various instruments, traders can mitigate the risk associated with any single position. This helps in reducing overall portfolio volatility.

In contrast, while monitoring emotional states is essential for maintaining a disciplined trading mindset and can indeed impact decision-making, it does not fit as a clearly defined component or strategy within a conventional risk control framework. Risk control plans focus mainly on measurable and actionable steps that limit negative outcomes, which is why this aspect is not included in their core components.