Building a trading plan in 7 steps (with a template)
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A trading plan turns emotional decisions into written rules. The 7 essential sections, a complete example and how to evolve it over time.
- A plan fits on one page and is reread before every session.
- It defines what to trade, when, how to enter, how much to risk and when to stop.
- Every rule must be checkable: “yes/no”, not “if it feels right”.
- Change the plan only after reviewing statistics, never mid-session.
Most beginner traders have a method in their head and no plan on paper. The result: rules change with mood, the last loss or the last video watched. A written trading plan does not make you smarter; it makes you consistent, which is the prerequisite for measuring and improving anything.
1. Goals and constraints
Start with the frame: capital allocated, time available, a realistic goal. “Make 10% a month” is not a goal, it is a wish. A useful goal is about process: “follow my plan on 95% of trades this month”. Also set the maximum acceptable loss on total capital before stopping everything to review the method (for example −15%).
2. Markets and hours
List the markets you trade (for example BTC and ETH only) and your time windows. Specialising in two or three markets lets you learn their behaviour, usual volatility and key levels. Also set the times to avoid: macro data releases, illiquid nights (see spread and liquidity).
3. Allowed setups
Describe each trade setup as checkable conditions:
Example — “VAL rejection”: (1) price returns to the previous day’s value-area low; (2) the footprint shows absorption or a diverging cumulative delta; (3) a 5-minute candle closes back inside value; (4) the higher-timeframe trend (1-hour 50 EMA) is not bearish. All four conditions are mandatory.
Two or three setups are enough. Any trade that fits none of them is not taken.
4. Entry and exit rules
- Entry: order type (limit at the level, or market on confirmation).
- Stop-loss: where and by what logic (structure, ATR), and a ban on moving it further away.
- Target: opposing level or R multiple; any partial exits.
- Management: when to move the stop to break-even, when to trail, time-based exit.
5. Risk management
| Rule | Example |
|---|---|
| Risk per trade | 1% of capital (the 1% rule) |
| Minimum reward:risk | 1.5 : 1 |
| Simultaneous positions | 2 maximum, never two correlated ones |
| Maximum daily loss | −3%: stop until tomorrow |
| Maximum leverage | 3× |
6. The routine
- Before the session (15 min): reread the plan, mark key levels, check the economic calendar, note how you feel.
- During: take only plan setups, log each trade in the journal at entry.
- After (10 min): complete the journal, record whether the plan was followed, take screenshots.
- Every week: review statistics by setup (see trading journal).
7. Stop rules and behaviour
This is the most often forgotten section, and the most useful. It contains the psychological biases:
- 3 consecutive losses → break of at least 2 hours.
- Daily target reached → stop (protect gains from overconfidence).
- Fatigue, anger, personal stress → no trading that day.
- No trading decision based on a social-media post.
Evolving the plan
A plan is not set in stone, but it is never changed mid-session. Changes are decided during the review, based on numbers: a setup with negative expectancy over 30 trades is suspended; a rule you keep breaking is either removed or reinforced. Date every version of the plan.
The Bullmarket simulator is the ideal place to break in a new plan: use the “setup” field to name each configuration, then export your history to CSV to compute the expectancy of each one.
Educational content only — not investment advice. Trading involves the risk of losing capital.