A trading plan is a written set of rules that governs how you trade — removing guesswork and emotion from your decisions. Making one should come before your first trade, not after your first loss.
What to Include
- Your goals — realistic, time-bound, and tied to how much time you can actually dedicate to trading.
- Risk tolerance — how much you are willing to risk per trade (commonly 1–2% of your account) and overall.
- Markets and instruments — which currency pairs (or other instruments) you will focus on, and why.
- Entry and exit rules — the specific conditions that trigger you to open and close a trade.
- Position sizing rules — how you calculate trade size based on your risk tolerance.
- A trading journal — a record of every trade and the reasoning behind it, reviewed regularly.
Test It Before You Trust It
Run your plan on a demo account first. If it does not hold up with virtual money, it will not magically work better with real money.
Revisit It Regularly
Markets change, and so should your plan — but only through deliberate review, not impulsive changes mid-trade. See our guide on reviewing and adjusting your trading plan.