Writing a trading plan

Every rule in this course is easy to agree with and hard to follow at 2 p.m. with a trade going wrong. A written plan is how you make the calm version of yourself the one in charge.

What a plan must contain

A trading plan is short. One page is right. It answers, in writing:

1. What you trade (which pairs) and when (which sessions, which days).
2. Timeframes: higher, working and entry.
3. Risk per trade and total open risk, as percentages.
4. A daily loss limit: the loss at which you close the platform for the day.
5. The setup: what must be true before a trade is even considered.
6. Entry trigger, stop rule and target rule.
7. Review: when you journal and when you read the journal back.

Write every rule so that you can check afterwards whether you followed it.

Write yours

My trading plan

Markets I tradeTimeframes (higher / working / entry)When I tradeMaximum risk per tradeDaily loss limit (stop trading for the day)My setup (what must be true before I trade)Entry triggerStop-loss ruleTarget ruleReview routine

Download as text fileClear

Saved automatically in this browser. Download a copy and keep it where you can see it while you trade.

Notice how most lines are numbers or yes/no conditions.

The daily loss limit

This rule stops one bad morning becoming a bad month. Two losses in a morning is normal. Four losses in a morning almost always means the market is not behaving as your method expects, or you are not. Either way, the fix is the same: stop. The market will be there tomorrow.

What would you do?

It is 11 a.m. You have lost two trades, −2%, which is your daily limit. A third setup appears and it is the cleanest one all week. What do you do?

Take it. The limit is a guideline, and this setup is clearly better than the first twoTake it at half size, as a compromiseClose the platform. Note the setup in the journal and review it tomorrow

Quick check

1. Question 1 of 3

   Which of these belongs in a trading plan?

   AHow much you expect to make this monthBThe loss at which you stop trading for the dayCA list of indicators you find interesting

Go deeper: How to keep a trading journal that actually helps · How to Write a Trading Plan