Building a simple trading plan
A trading plan is a written set of rules for what you trade, when, and how. It turns decisions you'd otherwise make under pressure into decisions you made calmly in advance. A beginner's plan can fit on one page.
What goes in it
- Market and hours: which instrument you trade and during which hours (for example, one index future during the first two hours of the US session).
- Setups: one or two specific patterns you trade, each defined precisely enough that someone else could spot it: what has to happen before you enter, where the entry is, where the stop goes, and where you take profit.
- Risk rules: your risk per trade, maximum trades per day, and daily loss limit (lesson 5).
- Routine: what you do before the session (check the economic calendar, mark key levels, check in on your own state) and after it (journal, lesson 8).
- A checklist: three to five yes/no questions you answer before every entry. If any answer is no, you don't take the trade.
Keep it testable
The point of defining setups precisely is that you can then measure them. After 50 or 100 trades you'll know whether a setup makes money, which you can't tell from memory. That's why the plan and the journal go together.
A plan you actually follow
Most plans fail not because they're wrong but because they're ignored in the moment. Keep it short, keep it visible while you trade, and review each week whether you followed it. Our guide to trading plans and checklists goes deeper, with examples of rules and checklist questions.