You've logged trades for months. Maybe forty, maybe a hundred. But if someone asked you for your rules, you'd have to stop and think.
The plan is already in your journal. Here's how to get it out.
Step one: what do you check on nearly every trade?
Go through your logged trades and list the things you checked before getting in. Each of these is what traders call a confluence: one thing you want to see before you take a trade. What confluence means in trading has examples from different styles.
Now look at which ones show up on nearly every trade. Those are the core of your plan: the checklist you run before you take a trade.
Keep it to a handful. If the list has ten items, you're describing everything you've ever looked at, not how you actually trade.
Step two: where did it work?
Split those trades by what the market above you was doing. Was the bigger chart trending, which means moving mostly one way, or going sideways?
Say you have sixty trades with your core checklist. Forty came while the bigger chart was trending, and they did well. Twenty came while it was sideways, and they lost a little. That's a line in your plan: "Only take this when the bigger chart is trending."
If both sides are thin, a handful of trades each, don't pretend. Leave that line open and write "not enough trades yet". An honest gap is more useful than a rule built on six trades. How many trades before you can trust a setup explains why.
Step three: how did you get in, and what did you do after?
Look at how you entered: straight away, or after waiting for price to dip back a little first? Then look at what you did once you were in. Did you move your stop to your entry price so the trade could no longer lose (traders call that break-even), take part of the profit early, or hold to your target?
You probably did it more than one way. That's fine. For now, don't turn it into a rule. Write it down as "the ways I traded it, and how each one did", with the number of trades next to each.
Why not just pick the best one? Because with a few trades on each side, the better-looking one may simply have been luckier. Keep both in view and let more trades decide.
Step four: write it as a checklist
Put it on one page, in plain words, in the order you'd use it:
- The things you check, from step one.
- When to take it, from step two, or "open" if you can't tell yet.
- How you get in and what you do after, from step three, with more than one way written down if you still use more than one.
Next to each line, write how many trades it rests on. "Bigger chart trending: fifty trades" reads very differently from "bigger chart trending: six trades". That number keeps you honest about what you know and what you're guessing.
Step five: freeze it
From today, the plan stays as it is for a set stretch of trades. Pick the length of that stretch now and write it on the plan, so you can't quietly shorten it later. Every trade you take from here is a test.
Most people skip this step, and it's the one that matters most. Rules written from your past trades will always look good on those same trades, because that's where they came from. It's like writing the answers to a quiz after you've seen them. The only fair test is on trades the plan hasn't seen.
You're allowed to change the plan. But when you do, the count starts again and the new version is a new plan. Keep the old one next to it, so you can see which does better.
How will you know whether it's working?
Decide now, before the new trades come in. Deciding afterwards is how people talk themselves into whatever they hoped to see.
Compare the plan's trades with your other trades from the same weeks. You'll take some trades that match the plan and some that don't. How do the two groups compare?
This matters because markets have easy and hard stretches. If the whole market was easy for a month, your plan's trades will look good, and so will everything else you took. Comparing with your other trades from the same weeks takes that out.
So don't compare with zero. "My plan made money this month" says less than "my plan did better than the rest of my trading this month".
What can a plan built on ten trades tell you?
It can tell you that you have a plan to test. It can't yet tell you whether the plan works.
Write both sentences at the top of the plan. You'll read them every time you open it, and they stop a first draft from being treated as a finished thing. That's no reason to wait: a plan written down at ten trades and tested honestly teaches you more than a plan you carry in your head for a year.
As the trades come in, one of three things happens. The plan stays ahead of your other trades. It's still too early to say. Or it stops working. Why your setup stopped working covers what to check if it's the last one.
Questions people ask next
What should a trading plan include?
The things you check before you enter, the kind of market you take the trade in, how you get in, where your stop and target go, and what you do once you're in. Add your own rules about risk, like how much you lose before you stop for the day.
How long should a trading plan be?
One page. If it doesn't fit on a page, you won't read it before every trade, and a plan you don't read is only a document.
How often should I change my trading plan?
As rarely as you can. Pick a stretch of trades before you start, and don't change anything until it's done. Every change starts the count again.
Can I make a trading plan without a journal?
You can write rules from memory, but memory keeps the wins and drops the losses. A plan built from logged trades starts closer to what really happened.
Where does EdgeFlow fit in?
This is what Edge Builder does with your journal. It writes the plan out with the number of trades behind each line. When you say so, it freezes the plan and tests it on the trades that come after, against the rest of your trading in the same weeks. It can't promise the plan will hold up. It shows you whether it does.