Building a Written Trading Plan That Survives Contact

A trading plan is not a prediction document. It is an operating manual that tells you what to do when conditions occur, so that decisions are made in advance rather than under pressure.

Section 1: scope

Name the instruments you will follow and, more importantly, the ones you will not. Scope creep — adding markets because they moved — is a common source of unforced losses.

Section 2: setups

• Conditions that must be true before an entry is considered.
• The exact invalidation level that defines a wrong idea.
• How the exit is determined for correct ideas.
• Which conditions disqualify the setup entirely.

Section 3: sizing

Specify risk per trade, maximum concurrent risk, and correlated-group limits as fixed percentages. Sizing rules should never depend on conviction, because conviction is highest precisely when it is least reliable.

Section 4: operating hours

Define when you trade and when you are simply not in the market. Most retail damage occurs outside planned sessions, when the decision is driven by availability rather than opportunity.

Section 5: metrics

• Rule adherence rate — the percentage of trades that followed the plan.
• Average loss versus average win, tracked separately.
• Maximum drawdown and time to recovery.
• Cost as a percentage of gross return.

Section 6: infrastructure

List the tools the plan depends on: charting, journal, alerting, and the platform itself. If a plan requires functionality your platform does not provide, either the plan or the platform has to change. That is exactly the question our platform evaluation checklist is designed to answer.

Together with the LW Management review and the risk management framework, this template forms the practical core of the research published on this site.