What Is a Trading Plan, and Why Write One Down?
A trading plan is a short written document that says what you trade, when you trade it, and how you handle risk. Its job is simple: to make decisions in advance, while you are calm, so you do not have to invent them in the middle of a fast market.
What a basic plan covers
- Markets and timeframes. Which instruments you follow and which chart timeframes you use.
- Entry conditions. The specific things that must be true before you consider a trade.
- Risk per trade. The most you are willing to lose on a single idea, decided before you enter.
- Exit rules. Where an idea is proven wrong, and how you manage a trade that works.
- Review routine. When and how you look back at what you did.
Why writing it down helps
Rules that live only in your head tend to bend under pressure. A written plan gives you something to check your behavior against, and something to improve one change at a time.
Keep it small
A first plan can fit on one page. You can refine it as you learn. A plan does not remove risk or promise results, but it makes your process clear and reviewable.
This article is educational and is not investment advice. Trading involves risk, including loss of capital.
