How to write a trading plan, with a free template
“Fail to plan, plan to fail” is a cliché because it’s true. A trading plan is the difference between trading a system and gambling with extra steps. It doesn’t need to be long. It needs to be written down, specific enough to follow, and honest enough to review.
What a trading plan is (and isn’t)
A trading plan is a short document that answers, in advance, every decision you’ll face at the screen: what you trade, when, which setups, how much you risk, how you manage the trade, and when you stop for the day. It isn’t a forecast of where price is going. It’s a set of rules for how you will behave, whatever price does.
The free template
Copy this into a document and fill in every blank. If you can’t fill one in, that’s the gap in your trading.
1. WHY I TRADE
My goal for the next 3 months is ___ (a process goal, e.g. “follow my plan on 90% of trades”)
2. MARKETS AND HOURS
I trade ___ (max 3 markets)
I look for trades between ___ and ___ UK time only
I don’t trade ___ minutes either side of high-impact news
3. MY SETUPS (max 3)
Setup name: ___ Timeframe: ___
Conditions: ___
Entry trigger: ___
Stop goes: ___ Target goes: ___ Minimum R:R: ___
I skip it if: ___
4. RISK RULES
Risk per trade: ___% of my balance (lot size from my stop, every time)
Daily loss limit: ___R. When I hit it, I stop for the day
Weekly loss limit: ___R
Maximum open trades: ___
5. MANAGING THE TRADE
At ___ I take a partial / move my stop to breakeven
I never widen my stop
I close early only if ___
6. MY ROUTINE
Before: check the calendar, mark key levels, write my bias
During: only trade setups from section 3
After: log every trade within 5 minutes
7. REVIEW
Every ___ (day of the week) I spend 30 minutes reviewing my journal
I change only one rule at a time, after at least 30 trades
A worked example (gold, London open)
| Section | Example |
|---|---|
| Markets and hours | XAUUSD only. 07:00–10:00 UK. Flat 30 minutes either side of high-impact US news. |
| Setup | Asian range sweep on M15: London trades through the Asian high or low and closes back inside; enter on the CISD close. |
| Stop and target | Stop beyond the sweep wick. Target the opposite side of the Asian range or the next liquidity. Minimum 1:1.5. |
| Skip if | Two closes beyond the level (breakout), or no CISD by 10:00 UK. |
| Risk | 1% per trade. Daily limit 2R. Weekly limit 5R. One trade at a time. |
| Management | Half off at 1R, stop to breakeven, rest to target. |
The risk rules matter most
You can trade a mediocre setup with great risk rules and survive long enough to improve. You can’t survive a great setup with no risk rules. Three numbers do most of the work:
- Risk per trade: 0.5–1% is common. At 1%, ten losses in a row costs you under 10% of your account (see drawdowns and losing streaks).
- Daily loss limit: 2R or 3R. It stops one bad day turning into a bad month.
- Minimum R:R: pick it from your win rate, not from a forum. See risk to reward explained.
Make it a living document
A plan you never change is either perfect or ignored. Review it every month against your journal. If the journal shows a setup losing money over 30+ trades, or a session you consistently trade badly, change the plan, date the new version, and keep the old one. Over a year, that version history is your trading education.
Plan it, log it, prove it
The Trader’s Ledger has 25 setups already written in this format, a daily loss limit on its calendar, and a “followed my rules?” field that shows what breaking your plan costs you. £19 once, with a free 49-page trading course that ends with a 30-day plan.
Get The Trader’s LedgerFrequently asked questions
What should a trading plan include?
The markets and hours you trade, your setups with exact entry, stop and target rules, your risk per trade and daily loss limit, how you manage open trades, your routine, and how you review your results.
How long should a trading plan be?
One or two pages is plenty. It needs to be specific, not long.
How much should I risk per trade?
Many traders risk 0.5% to 1% of their account per trade, so a normal losing streak can’t do serious damage.
How often should I change my trading plan?
Review it monthly, and change one rule at a time, only after at least 30 trades show the change is needed.
Educational content only, not financial advice. Trading carries a high level of risk and you can lose more than you expect. Examples use illustrative prices.