Building a Trading Plan

Write the rules you trade by, then follow them.

1. Why You Need a Written Plan — A trading plan is the rulebook you write while calm and follow while the market is moving. Here is why writing it down matters and what a complete plan covers.
2. Defining Your Setups — A setup is a specific, repeatable pattern you trade. Here is how to define one or two setups so clearly that you could hand the checklist to someone else.
3. Entry and Exit Rules — Entries get the attention, but exits decide results. Here is how to write clear rules for getting in, cutting losses, taking profits and leaving trades that go nowhere.
4. Risk Rules and Daily Limits — Risk rules decide how long you survive. Here is how to set risk per trade, total open risk, loss limits and a drawdown plan that cuts size when things go wrong.
5. Journaling and Key Metrics — Your journal turns trades into data. Here is what to record for each trade and the handful of metrics that show whether your plan, and your discipline, are working.
6. Reviewing and Improving the Plan — A good plan changes slowly, based on evidence. Here is a weekly, monthly and quarterly review routine and the rules for making changes without chasing noise.