How to Build a Trading Plan: A Step-by-Step Guide With Template

A trading plan is a written set of rules for how you trade. It decides in advance what you trade, when, how much you risk and how you review. Without one, every decision is made in the moment, under pressure. With one, most decisions are already made.

1. Goals and constraints

• Why are you trading? Income, growth, learning?
• How much time can you give it each day?
• How much capital, and how much of it can you afford to lose?

Write process goals, not just profit goals. See process vs outcome.

2. Markets and instruments

• Which markets: stocks, options, futures, forex, CFDs, crypto?
• Which instruments within them, and minimum liquidity requirements?
• Which hours you trade. See best trading hours.

3. Setups

For each setup, one page:

• Name.
• Market conditions where it applies.
• Entry trigger.
• Stop placement.
• Targets and trade management.
• One or two example charts.

Keep the list short. Three well-defined setups beat ten vague ones. See tagging trades.

4. Risk rules

• Risk per trade. See the 1% rule.
• Daily loss limit.
• Maximum open positions and exposure per theme. See correlation risk.
• Rules for events: earnings, news, weekends.
• What happens in a drawdown, for example halving size at −10%.

5. Routines

• Pre-market routine.
• During the session: how you manage trades and breaks.
• After the session: journal entry and post-trade review.
• Weekly and monthly reviews.

6. Personal rules

The rules that address your specific weaknesses, from your journal:

• "No trades in the first five minutes."
• "Stop after two losses in a row."
• "No trading when tired."

7. Review and update

Set a regular date, such as monthly, to review the plan against your results. Change one thing at a time, so you can tell what helped.

Keep it to a few pages

A plan you never read does not help. Keep it short, keep it where you trade, and read the key rules every morning.

In TradeThink

Put your daily checklist in the journal, record whether you followed the plan each day, and use setups and tags so the reports measure each part of your plan.