Most trading plans fail for the same reason most diets do: they are too long, too aspirational, and written by someone in a good mood. A plan that works is short enough to read in thirty seconds before the open.
1. What you trade
Name the instruments and the hours. Not "equities" - "MNQ and MES, 09:30 to 11:30 New York". A list this narrow feels restrictive and is the single highest-value line in the document, because it rules out every opportunity you were going to take badly.
2. Your setups
Three at most, each described in one sentence with a condition you could check without interpreting it. "Opening range break: price closes above the 09:30-09:45 high on volume above the five-day average."
If you cannot write a setup in one sentence, you do not have a setup - you have a feeling with a chart attached.
3. Risk
- Risk per trade, in money, not percent - percent requires arithmetic at the moment you are least able to do it.
- Maximum trades per day.
- Daily stop: the loss at which you close the platform.
The daily stop is the line that saves accounts. Make it a number, not a judgement.
4. Where the stop goes, decided in advance
Per setup, not per trade: structure, a fixed distance, or an ATR multiple. Pick one method per setup and keep it. Changing method mid-trade is how a planned $250 loss becomes a $900 one.
5. How you exit winners
The section everyone skips, and the one that decides your risk-reward ratio. Fixed target, trail after a set move, scale out in halves - any of them works. Having no rule does not.
6. The one rule for this week
A single behavioural rule, written fresh each week, aimed at whatever your last review found. "No new positions after 11:00." "No second trade within five minutes of a loss." One rule, because you will not keep five.
What to leave out
- Profit goals. A daily or monthly target makes you trade more when you are behind, which is exactly backwards.
- Market commentary. It dates in a week and it is not a decision.
- Anything aspirational. "Be disciplined" is not a rule. "Close the platform at −$500" is.
The plan is only half of it
A plan with no feedback loop is a wish. The point of tagging every trade with its setup is that at the end of the month you can ask the plan a question: did I trade the three setups I wrote down, or did I take forty trades and tag half of them "other"?
That "other" pile is the real trading plan. The document is the one you intended.
Journal prompts
- What share of last month's trades match one of my written setups?
- Did I ever trade outside my stated hours, and how did those do?
- Did I hit my daily stop and keep trading?