A trading plan is a set of written rules that define when to enter, when to exit, and how much to risk on each trade. It keeps psychology in check and ensures consistency.
Define Your Goals
- Are you a scalper/day trader or swing/long-term trader?
- Monthly goal: what % growth do you aim for?
- Risk profile: conservative or aggressive?
Strategy Rules
- Entry Conditions: Which indicator/pattern/price action setup triggers your trade?
- Exit Conditions: Where do you set TP & SL?
- Filters: Trend direction, volume confirmation, time filters (e.g., no trades in low-volume sessions).
Risk Management
- Max risk per trade: 1–2% of account
- Max number of open trades: 2–3
- Avoid correlated risk (e.g., BTC + ETH long at same time)
- Minimum R:R ratio: 1:2
Psychology Rules
- No revenge trades ❌
- No FOMO entries ❌
- After 2 consecutive losses → take a break ✅
- Keep a trading journal (write down reason for every trade)
Review & Adjust
- Weekly report: number of trades, win rate, R:R, total PnL
- Analyze mistakes: was SL too tight? Did you enter early?
- Adjust rules that don’t work
Example Trading Plan (Template)
- Market: BTC/USDT
- Timeframe: 1H & 4H
- Indicators: RSI, EMA 50, MACD
- Entry Rule: Buy when RSI < 30 + EMA bounce
- Exit Rule: SL at swing low, TP at 1:2 R:R
- Risk: 1% per trade, max 3 trades/day
- Psychology: No revenge trading, break after 2 losses
- Review: Weekly report on Sundays