You have watched the videos. You have a setup you like. Someone in the comments says, "Do you even have a trading plan?" and you realise you don't. Not on paper, anyway.
Writing one is less work than it sounds. A first plan is one page. Here is what goes on it.
What is a trading plan?
A trading plan is a short written description of how you trade. It says which trades you take, how much you risk, and how you manage them.
It is different from a trading journal. The plan is what you intend to do, written before. The journal is what you actually did, written after. You need both, because the gap between them is where most lessons are.
Question one: what do you trade, and when?
Name the markets. "EUR/USD and gold." "The Nasdaq futures." "Bitcoin and Ether." Fewer is better at the start. Each market moves in its own way, and you learn faster by watching the same ones.
Name the hours. "The first two hours after the New York open." "London morning only." If you trade crypto, which never closes, this line matters even more. Without set hours you will trade tired, bored or late at night.
Question two: what has to be true before you enter?
This is the heart of the plan. Write down the things you check before every trade. Traders call these confluences: separate reasons that point the same way.
Keep the list short. Three to five checks is plenty. For example:
- The bigger chart is moving in my direction.
- Price is at a level I marked before the session.
- A candle closed the way my setup needs.
Your list will look different. A supply and demand trader, an indicator trader and someone who uses smart money concepts would each write their own. The point is that each line is something you can answer yes or no, before you click. What is confluence in trading? has more examples from different styles.
Question three: how much do you risk?
Write one number. Many traders start with one percent of their account per trade, and some beginners go lower. With a thousand euros, one percent is ten euros.
Then write how you size the trade: stop first, size second, so that hitting the stop costs that amount. This line alone prevents most of the disasters that end new accounts.
Question four: how do you get out?
Two exits, both decided before you enter.
When you are wrong. Where does the stop go? Usually just past the price that would prove your reason for the trade false.
When you are right. Where is your target, or how do you decide when to close? A fixed target, a level on the chart, or a rule like "close half at the first level and trail the rest".
Also write what you do in between. Do you move the stop to your entry at some point? Do you never touch it? Pick one and write it down.
Question five: when do you stop?
This is the line most plans forget. Write a limit for a bad day. For example: "After two losses, or after losing two percent, I stop for the day." Write one for a bad week too.
These limits are not about the market. They are about you. They stop a normal losing day from turning into a revenge-trading spiral.
How detailed should it be?
Short enough to read in one minute before a session. If it runs to five pages, you will not read it, and a plan you do not read is a plan you do not follow.
Every line should be something you can check afterwards. "Be patient" cannot be checked. "Only enter after the candle closes" can. If you can look at a trade and say yes or no to a line, keep it. If not, rewrite it.
What do you do after you write it?
Trade it, unchanged, and log every trade in your journal. Note for each trade whether you followed every line.
After a few dozen trades you will have your first real feedback. Some lines will clearly matter. Some will turn out to make no difference. Then you can rebuild the plan from what your own trades show. How to turn your trading journal into a trading plan is that next step.
Resist editing the plan after every loss. A change every few trades means you never test any version long enough to learn from it. How many trades you need before you can trust a setup explains why.
Other questions traders ask
Is there a trading plan template?
The five questions above are the template: what and when, entry checks, risk, exits, and stop rules. Write one or two lines under each and you have a working plan.
What is the difference between a trading plan and a trading strategy?
A strategy is the idea of how you find trades, like a breakout or a bounce from a level. A plan wraps the strategy in rules for risk, exits, hours and limits.
Do I need a plan if I trade by feel?
Yes, even a short one. Without written rules you cannot tell later whether a loss came from the idea or from how you traded it that day.
Read next:
Once you have trades to look at, EdgeFlow counts which of the things you check showed up in your winners and your losers. It helps you write the plan as a checklist, with the number of trades behind each line. You can freeze the plan and see how the trades after it do. Read how it works. It does not write a plan that is sure to work. Nobody can.