Trading Basics

Building Your Trading Plan

A trading plan is the documented ruleset that turns reactive gambling into systematic execution.

Key rules

1. Define entry criteria clearly — if X then Y
2. Include position sizing rules based on % risk per trade
3. Specify exit rules for both profit and loss scenarios
4. List conditions that invalidate trading (e.g. high-impact news)
5. Review plan performance using your trade journal data

A trading plan defines: what you trade, when you trade, why you enter (setup criteria), how you manage risk, and when you exit. Without a plan, you make emotional decisions under pressure.

Your plan should be detailed enough to follow without improvisation, but flexible enough for evolving market conditions. Review and update it quarterly based on journal data.