Trading Plan

What is a Trading Plan?

A trading plan is a written document that defines exactly how you will trade. It covers your strategy (what setups you trade), risk management (how much you risk), execution rules (when and how you enter/exit), and behavioral guidelines (what to do after losses, when to stop trading). Think of it as your personal trading constitution.

Core Components of a Trading Plan

• Market and session: Which instruments and trading sessions you focus on
• Setup criteria: Exact conditions that must be met before entering a trade
• Risk rules: Maximum risk per trade, daily loss limit, maximum positions
• Entry mechanics: Order type, entry trigger, position sizing formula
• Exit rules: Stop loss placement, take profit targets, trade management
• Behavioral rules: Maximum trades per day, post-loss protocol, session end time

Why Plans Fail

Most traders write a plan once and never reference it again. The plan isn't useful as a document — it's useful as a checklist that you physically reference before every trade. The traders who pass prop firm challenges consistently report that following their plan was more important than having the perfect plan.