Trading Plan

A trading plan is a written decision framework defining eligible setups, risk limits, execution rules, review methods, and conditions for not trading.

A useful plan connects market criteria with position size, maximum loss, order choice, exit logic, event exposure, and account limits before emotion rises. Records then allow the trader to compare actual decisions with the intended process and separate execution errors from strategy outcomes. The plan should evolve through evidence and changed circumstances, not be rewritten impulsively to excuse an open loss.