Academy · Intermediate

Building a trading plan

A trading plan is a decision made in advance, in writing, while you are calm. That is its entire value, and it is why it has to be specific.

  • ✓ 14 lessons
  • ✓ 63 minutes end to end
  • ✓ Free in MarketPro
  • ✓ No sign-up to start reading

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A trading plan is a decision made in advance, in writing, while you are calm. That is its whole function, which is why it has to be specific enough to break. "Trade the trend with good risk management" cannot be broken, so it cannot be followed either. "Long only above the 200 EMA on the 4 hour, 1 percent risk per position, stop below the prior swing low, no new entries within 30 minutes of a high impact release" can be checked line by line at the end of the week.

This category covers defining an edge and testing whether it is actually there, choosing a market and a timeframe you can realistically watch, writing entry, exit and sizing rules, a daily and weekly routine, and a review cadence that keeps the document honest as conditions change.

It draws on risk management, trading strategies and trade journaling, so it makes most sense once those are behind you.

The 14 lessons in order

  1. Defining Your Trading Edge An edge is a repeatable reason to expect a favourable outcome across many trades, specific enough that you can count instances… Intermediate4 min
  2. Setting Realistic Goals And Expectations A realistic goal is one your expectancy and trade frequency can actually produce, stated as a range wide enough to contain… Intermediate4 min
  3. Choosing A Market And Timeframe Focus Narrow the plan to a few instruments you can watch in the same hours, and one timeframe you decide on, for long enough to learn… Intermediate4 min
  4. Writing Clear Entry Criteria Rules An entry rule is written well enough when a second person, handed the same chart, marks the same bar as you. Advanced4 min
  5. Exit Rules: Stop Loss And Take-Profit Frameworks Put the stop where the idea is proved wrong, then size the position so that distance costs what the plan allows. Advanced4 min
  6. Position Sizing Models Sizing decides what a single trade can cost, and it moves long-run results more than entry timing does. Advanced4 min
  7. Risk Management Rules At The Portfolio Level Per-trade limits say nothing about how open positions interact, and the gap between the two is larger than most people assume. Advanced4 min
  8. Handling Drawdowns And Losing Streaks Most bad decisions in a drawdown come from mistaking an ordinary sequence of losses for evidence that something has broken. Advanced4 min
  9. Trading Plan Backtesting Basics Applying written rules to old data, mechanically, including every instance you would rather not count. Advanced5 min
  10. Adapting Your Plan To Changing Market Conditions Change the plan when a measurable property of the market has changed, not when the last three trades lost. Advanced6 min
  11. Building Rules Around Trading Sessions And Volatility Which hours your setups are valid in, and what happens to size and stops outside them. Intermediate5 min
  12. Defining Your Risk Tolerance And Capital Allocation Fix how much capital belongs in the account and what drawdown ends the experiment, then derive everything else from the second… Intermediate5 min
  13. Creating Rules For When Not To Trade The conditions under which you will not open a position, written with the same specificity as your entries. Intermediate5 min
  14. Documenting And Reviewing Your Trading Plan Over Time Six sections, a version number, and a dated comparison against what you actually did. Intermediate5 min

Guided paths that use these lessons

A path is an ordered run through lessons from several categories, which is how the app sequences them. One path draws on building a trading plan.

Build Your Trading Plan

The capstone path: turn everything you've learned into a written plan with entry, exit and risk rules.

10 lessons
Trade · Learn · Earn

Take building a trading plan with you

All 14 lessons in this category, plus the other 306 in the academy, with a quiz on each one and your place kept. Free on any MarketPro account, in the app or your browser.

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