Ask experienced traders what changed things for them and "writing a proper plan" comes up again and again. Not because a document is magic, but because a written plan turns hundreds of in-the-moment decisions into a few decisions made calmly in advance. This guide explains how to write a trading plan, section by section, and gives you a free template to copy.

What is a trading plan?

A trading plan is a written set of rules that defines what you trade, when, how you enter and exit, and how much you risk — plus what you do when things go wrong.

It's different from a strategy. A strategy is one part of the plan (your setups and entry rules). The plan wraps that strategy in risk management, routine and review, which is where most beginners actually struggle.

Why bother writing it down?

  • Decisions under pressure are worse. When a trade is moving against you, you're not at your most rational. Rules written beforehand decide for you.
  • You can't review what you didn't define. If your rules live in your head, every loss can be explained away. Written rules make it obvious whether the strategy failed or you didn't follow it.
  • Consistency produces usable data. Only a consistent process gives you trade results you can learn from.

The nine sections every trading plan needs

1. Your goals and constraints

Be realistic and specific about the process, not just outcomes. How many hours a week can you genuinely spend? What account size are you working with, and what's the most you could lose without it affecting your life? "Make £X a month" is a wish; "follow my rules on every trade for the next 50 trades" is a goal you control.

2. Markets and instruments

List exactly what you trade — for example, EUR/USD, GBP/USD and the Nasdaq-100. Fewer is better as a beginner. Each market has its own personality, session times and costs.

3. Trading times

When will you trade? London session, New York open, specific hours? Also list when you won't trade — for example, the 15 minutes either side of high-impact news, or after 9pm when you're tired.

4. Timeframes

Which timeframe defines the trend or bias, and which do you use for entries? A common structure is a higher timeframe for direction (e.g. 4-hour) and a lower one for timing (e.g. 15-minute).

5. Setup and entry rules

Describe your setup so precisely that someone else could identify it. Avoid words like "strong" or "looks good". For example:

  • Price is in an uptrend on the 4-hour (higher highs and higher lows).
  • Price pulls back into a marked support zone.
  • A bullish candle closes in the zone on the 15-minute.
  • Entry on the next candle's open.

If you use candlestick signals, define them — our guide on how to read candlestick charts can help.

6. Stop loss and exit rules

  • Where the stop goes (see where to put a stop loss).
  • Where the target goes, and the minimum risk-to-reward you'll accept (see risk-reward ratio explained).
  • Whether and how you trail the stop or take partial profits.
  • Rules for closing early (e.g. a time stop).

7. Risk management rules

This section matters most:

  • Risk per trade — a fixed percentage, commonly 1% or less.
  • Position sizing method — using the position size formula.
  • Maximum daily loss — e.g. stop trading for the day after 2–3% or after two losses.
  • Maximum open trades and correlated exposure (e.g. not long EUR/USD and GBP/USD at full size simultaneously).
  • Weekly or monthly drawdown limit — the point where you stop and review before trading again.

8. Routine and psychology rules

  • A pre-market checklist: news calendar, key levels marked, mindset check.
  • Rules for after a loss — e.g. a mandatory break before the next trade. See how to stop revenge trading.
  • Conditions under which you don't trade at all: ill, exhausted, emotionally distracted.

9. Journaling and review

What you record for every trade, and when you review. A weekly review of journal entries is where the plan improves.

Free trading plan template

Copy this into a document and fill it in. Keep it to one or two pages — a plan you can't read before each session won't be followed.

MY TRADING PLAN — version 1.0  (date: ____)

1. GOALS & CONSTRAINTS
   Hours per week:            ____
   Account size:              £____
   Process goal (next 50 trades): ____

2. MARKETS
   I trade only: ____, ____, ____

3. TIMES
   I trade:       ____ to ____ (UK time)
   I never trade: ____ (e.g. 15 min either side of high-impact news)

4. TIMEFRAMES
   Bias: ____     Entry: ____

5. SETUP & ENTRY (all must be true)
   [ ] ____
   [ ] ____
   [ ] ____
   Entry trigger: ____

6. EXITS
   Stop loss placed: ____
   Target placed:    ____
   Minimum R:R:      1:____
   Trailing/partials rule: ____

7. RISK
   Risk per trade:       ____% of account
   Max daily loss:       ____% or ____ losing trades
   Max open trades:      ____
   Drawdown stop & review at: ____%

8. ROUTINE & PSYCHOLOGY
   Pre-session checklist: ____
   After a loss I will:   ____
   I don't trade when:    ____

9. JOURNAL & REVIEW
   I record: date, market, setup, entry, stop, target, size,
             result in R, followed plan Y/N, screenshot, emotions
   Weekly review on: ____

How to make sure you actually follow it

  • Read it before every session. It takes two minutes.
  • Turn the entry rules into a checklist you tick before placing a trade.
  • Track "followed plan: yes/no" in your journal. This single column will tell you more than your profit and loss.
  • Change the plan only during reviews, never mid-session. Version it (1.0, 1.1...) so you know which rules produced which results.

Frequently asked questions

What should a trading plan include?

At minimum: markets, trading times, timeframes, precise entry rules, stop and target rules, risk per trade, daily loss limits, a routine, and how you journal and review.

How long should a trading plan be?

Short enough to read before every session — one or two pages is plenty. Detailed reasoning can live in a separate notes document.

What's the difference between a trading plan and a trading strategy?

A strategy is your method for finding and entering trades. A trading plan contains the strategy plus risk management, routines, psychology rules and review — the full operating manual.

How often should I update my trading plan?

Review it on a fixed schedule, such as weekly or monthly, using your journal. Avoid changing rules after a single loss — make changes based on a meaningful sample of trades.

Do I need a trading plan for a demo account?

Yes. Demo is where you test the plan itself. Trading demo without one only teaches random habits — see how long to demo trade before going live.

Key takeaways

  • A plan turns in-the-moment decisions into calm, pre-made rules.
  • Cover markets, times, setups, exits, risk, routine and review.
  • Keep it short, read it every session and track whether you followed it.
  • Change it only during scheduled reviews, based on evidence.

Go further: The free Trovia Academy gives you the building blocks to fill in every section of this template. If you'd like help turning your approach into a written, rules-based plan, book a free strategy call — it's free and there's no card needed, you just need a free Trovia account. You can also join the free Telegram community.

Educational content only — not financial advice. CFDs and other leveraged products are complex and carry a high risk of losing money rapidly. Read our risk warning.