What you'll learn
- Write a plan that covers goals, capital, process and review
- Set rules for drawdowns and breaks
- Keep the plan short enough to follow
Sections of a plan
| Section | Contents |
|---|---|
| Purpose and goals | Why you trade, what a good year looks like in process terms, not just money |
| Capital | What is in the account, what you can afford to lose, when you would add or withdraw |
| Strategy | The rule set from the previous lessons, by reference |
| Schedule | Which sessions and days you trade, when you prepare, when you review |
| Risk | Percent per trade, daily and weekly limits, maximum drawdown before stopping |
| Routine | Pre-session checklist, in-session rules, post-session journal |
| Contingencies | What you do after a losing streak, a big win, a technical failure, a life event |
| Review | Weekly and monthly review questions and the record you keep |
Process goals
A goal of making 5 percent a month is not under your control; the market decides. A goal of taking every valid setup, never widening a stop, and journalling every trade is entirely under your control, and doing those things is what produces the money over time. Set process goals and measure them; let the money be the result.
Contingencies
Decide now what you will do at a 10 percent drawdown, because you will not decide well at the time. Common rules: halve position size until the account recovers; stop trading for a week after three losing days; go back to the demo at a 20 percent drawdown. Decide also what to do after a large win, which produces overconfidence and oversizing as reliably as a loss produces revenge.
Keep it short
A plan you can read in five minutes is one you will read. Two pages is plenty. Reread it weekly and before any session that follows an unusual day.
Key takeaways
- The plan runs the business; the strategy runs the trades.
- Set process goals you control; the money follows.
- Decide drawdown and post-win rules in advance.
- Two pages, reread weekly.
Knowledge check
Trading forex, CFDs and other leveraged products carries a high risk of losing money. This lesson is general education, not advice. Risk disclosure.