Trading Psychology · Trading discipline · Article 1 of 4
Build Your Trading Plan
A trading plan doesn't need to be long. If it fits on one page, you'll actually read it. Answer these five questions honestly and you have a plan.
CFDs are complex instruments and carry a high risk of losing money rapidly because of leverage. Make sure you understand how CFDs work and whether you can afford to take the high risk of losing your money.
1. What will I trade, and when?
List the few markets you'll follow, such as two forex pairs and one index, and the hours you can trade them. Then choose a style that fits your day.
| Style | Typical holding time | Suits traders who |
|---|---|---|
| Scalping | Seconds to minutes | Can watch the screen closely and decide fast |
| Day trading | Minutes to hours, closed the same day | Have time during market hours and dislike overnight risk |
| Swing trading | Days to weeks | Have other commitments and can wait for moves to develop |
| Position trading | Weeks to months | Prefer bigger trends and fewer decisions |
2. What does a trade look like?
Describe the setups you'll take in plain words, so clearly that someone else could spot them. For example: “Price pulls back to a rising trend line on the four hour chart and forms a bullish candle.” If you can't describe it, you can't repeat it.
3. How will I get in and out?
Write the exact trigger for entry, where your stop loss goes and where you'll take profit. “Buy when the candle closes above the trend line, stop below the last low, target the previous high” is a rule. “Buy when it looks strong” isn't.
4. How much will I risk?
Set three numbers while you're calm: the most you'll risk on one trade as a share of your account, the minimum risk reward ratio you'll accept and the loss that ends your day or week. Add one line on what you'll do after a winning run, so good results don't make you careless.
5. How will I get better?
Choose when you'll review: a short check after each session and a longer look every weekend. Keep a journal, save screenshots of your best and worst trades and change the plan only when the evidence says so.
One page template
| Question | My answer |
|---|---|
| Markets, hours and style | |
| My setups, in plain words | |
| Entry trigger, stop loss, target | |
| Risk per trade, minimum risk reward, daily and weekly loss limit | |
| After a winning run, I will… | |
| When and how I review |
