Lesson 54 of 69
Building your trading plan
10 min read
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A is a written document that answers every decision in advance so that you are not making choices while money is at stake. It should fit on one page. If it does not, you will not follow it.
The seven sections
- 1Markets: exactly which instruments you trade, and nothing else. Example: EUR/USD, GBP/USD, XAU/USD.
- 2Hours: the session window you trade — for example the London to New York overlap only.
- 3Setup: the entry conditions in one sentence, specific enough to be broken.
- 4Risk: percentage per trade (1% or less), daily loss limit, maximum positions.
- 5Exits: where the stop goes, where the target goes, and the rule for moving to .
- 6Routine: what you do before, during and after the session.
- 7Review: when you review, and the metrics you track.
Example plan in one page
Markets: EUR/USD and XAU/USD. Hours: 12:00-16:00 UTC. Setup: daily up, pullback into a tested zone, or hammer, entry on a above the pattern high. Risk: 1% per trade, 2 trades max per day, stop the day at -2%. Exits: stop below the pattern low, target the previous , move to breakeven at 1R. Review: Sunday, 30 minutes, on all screenshots.
Track the right numbers
| Metric | What it tells you | Healthy beginner target |
|---|---|---|
| Win rate | How often you are right | 40-55% is perfectly workable |
| Average R multiple | Reward per unit of risk | Above +0.2R across 50 trades |
| Rule adherence | Whether you traded your plan | Above 90% — this is the real score |
| Max drawdown | The worst stretch you survived | Under 10% of the account |
Test before you trust
- 1Backtest by scrolling a chart by candle and recording 50 setups on paper.
- 2Forward-test on a for at least one month with your real position sizes.
- 3Go live with the smallest size your broker allows, and change nothing for 30 trades.
- 4Only increase size after a full review shows the process held under real money.
Change the plan on Sundays, never on Tuesdays
Edits made mid-session are emotion wearing the costume of improvement. Collect the evidence during the week, make one change at the weekend, then test that single change.
Key takeaways
- A plan names your markets, sessions, setups, risk per trade and exits.
- Rules must be specific enough to answer yes or no in seconds.
- Review and adjust after a sample of trades, never after a single loss.
- A plan you cannot follow under pressure is not yet a plan.
Knowledge check
3 quick questions — your best score is saved to your progress.
1. What must a trading plan specify?
2. How often should a plan change?
3. What makes a plan usable in real time?
Progress is saved on this device.
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