Most traders have heard that they need a trading plan. Fewer have one on paper, and fewer still follow it when a trade is losing. The reason is usually not laziness; it is that plans are written as aspirations ("be disciplined") instead of instructions. This article gives a template for a short, testable plan.
Why a written plan helps
Decisions made in the middle of a live trade are made under stress, with money at stake and incomplete information. Decisions made in advance, calmly, are better. A plan moves the hard thinking to a time when you can do it well. It also gives you something concrete to review: you cannot measure how disciplined you were without a standard.
The one-page template
1. Purpose and constraints
Write two or three sentences: why you trade, how much time you have, and what capital you can afford to risk. Be honest about being a part-time trader; a plan for a full-time desk will not fit a person trading before work.
2. Markets and sessions
List the pairs you will trade (a short list, not forty) and the hours you will trade them. A trader who knows the character of two pairs usually does better than one skimming twenty. See forex trading sessions for when liquidity peaks.
3. Setups, in checkable language
For each setup, write conditions that someone else could verify from a chart: timeframe, trend definition, entry trigger, invalid point. If the rule includes words like "looks strong," rewrite it. Vague setups cannot be backtested and cannot be reviewed.
4. Risk rules
- Risk per trade: a fixed percentage of the account, discussed in position sizing.
- Daily loss limit: a point at which you stop for the day.
- Weekly loss limit: a point at which you reduce size or pause for review.
- Maximum open risk: especially when positions are correlated; see currency correlation.
5. News and event rules
Decide in advance what you do around major releases and central bank decisions: stand aside, reduce size, or trade only specific setups. Our guide on high-impact news can help you choose.
6. If-then rules for bad moments
This section is the most valuable. Psychology research on implementation intentions suggests that specific if-then statements help people follow through. Examples:
- If I take two consecutive losses, then I close the platform for an hour.
- If I feel the urge to re-enter immediately after a stop, then I write the reason in my journal first and wait for the next valid setup. See losing streaks and revenge trading.
- If price moves to my stop, then I let it. I do not move it further away.
7. Routine
Pre-session: check the calendar, mark levels, run through the pre-trade checklist. Post-session: log trades in a journal with screenshots and notes on whether the rules were followed.
8. Review schedule
Pick a cadence, such as every Sunday for ten minutes and every month for an hour. Review process before results: did you follow the plan? Only change rules at review time, never mid-trade, and change one thing at a time so you can see its effect.
A sample skeleton
| Section | Example entry (illustrative) |
|---|---|
| Markets | Two major pairs |
| Hours | London open to early New York, weekdays |
| Setup | Pullback to a prior swing in a trend defined on the higher timeframe |
| Risk per trade | 0.5% of account |
| Daily stop | Two full losses or 1.5% down |
| News | Flat 15 minutes before top-tier releases |
| Review | Sunday evening |
These entries are examples, not recommendations; your numbers should reflect your own situation and test results.
Common reasons plans fail
- Too long. If it takes five pages, you will not read it. One page is enough.
- Never tested. A plan with no evidence behind it is a guess. Test it on historical data and on a demo before real money.
- No consequences. A rule you break without noticing is not a rule. Track compliance as a number.
- Rewritten after every loss. Variance is normal. A losing week is not proof the plan is broken; a break in the rules is a different matter. Read about expectancy to set realistic expectations.
Start small
If a full plan feels heavy, begin with three lines: maximum risk per trade, maximum loss per day, and one setup written in checkable terms. Follow them for a month, then add the next piece. A short plan that you follow beats a long one that sits in a folder.
Educational content only, not trading advice. Leveraged trading carries risk of loss.