A trading plan is simply your rules written down before you trade. It takes the guesswork out of decisions, keeps your risk under control and makes it much easier to learn from your results. It doesn’t need to be long — one page is plenty.
Why have a trading plan?
- It helps you stay consistent, especially when markets get exciting.
- It makes your risk clear before you’re in a trade.
- It gives you something to review and improve over time.
The 7 parts of a simple trading plan
1. Your goals
What are you aiming for — learning, a side interest, building a skill over time? Keep goals about process (“follow my plan on every trade”) rather than money targets.
2. Markets and times
Which markets will you trade (for example gold and EUR/USD), and when? Pick hours you can actually be at your screen — see Best times to trade gold.
3. Your setup
What has to happen before you enter? Write it as a checklist. For example:
– Price is above the 50-period moving average on the 4-hour chart
– Price pulls back to a support level
– A bullish candlestick pattern forms at that level
4. Entry and exit rules
Where exactly do you enter? Where is your stop-loss? Where do you take profit — a fixed target, or a trailing stop?
5. Risk per trade
Decide the maximum you’ll risk on any one trade — many traders use 1% or less of their account. Then use our position-size calculator to turn that into a lot size.
6. Daily and weekly limits
Set a point where you stop for the day — for example after two losing trades or a 2% drawdown. This protects you from “revenge trading”.
7. Review routine
Keep a journal: why you entered, what happened, and what you’d do differently. Review it every week.
Free one-page template
Copy this into a notebook or document:
My trading plan
Goal: ___
Markets: ___ Trading hours: _
Setup checklist: 1. _ 2. _ 3. _
Entry rule: ___
Stop-loss rule: ___
Take-profit rule: ___
Risk per trade: _ % of account
Daily stop: losing trades or _ % drawdown
News rule: I will / won’t trade around high-impact news
Review: every _ (day of the week)
Tips for sticking to your plan
- Test it on a demo account for a few weeks before going live.
- Change one thing at a time, then review the results.
- Keep it visible — print it out or keep it next to your platform.
Frequently asked questions
Do professional traders use trading plans?
Yes — written rules and risk limits are standard practice across the industry.
How long should a trading plan be?
Short enough to use. One page is ideal for most traders.
Next step: Read Lesson 27, Building a Trading Plan, in our free course — and get our free starter kit with a trading-journal template.
Capital at risk. This article is general education, not investment advice.