Writing a trading plan: rules before decisions

A trading plan is a written set of rules that you follow before, during and after each trade. Its main job is to make decisions before emotions are involved.

What a plan contains

1. Purpose and limits. Why you trade, how much money is set aside, and the maximum you accept losing in a day, a week and overall.
2. Markets. Which pairs you follow and why — usually liquid ones you understand.
3. Setups. The specific situations you trade, described precisely enough that someone else could recognise them.
4. Entry rules. What exactly must happen before you enter.
5. Exit rules. Where you exit if wrong, where you take profit, and when you exit if nothing happens.
6. Risk rules. Risk per trade, maximum open positions, no trading after a set number of losses in a row.
7. Routine. When you analyse, when you trade, when you do not.
8. Review. How often you check results and update the plan.

Why writing matters

A plan in your head changes with your mood. A written plan can be checked: did I follow the rules, and do the rules work? Combined with a trading journal, it turns experience into data.

A short checklist before each trade

• Is this one of my setups?
• Where is my exit if I am wrong, and what is my position size?
• Is the potential gain larger than the potential loss?
• Am I calm, or reacting to a recent win or loss?

This is general education. XFasil does not provide trading operations or investment advice; the Spot and Futures screens show market data only.