What Makes a Trading Plan Work

A trading plan isn't "buy low, sell high." It's a specific, rule-based system that tells you exactly what to do in every market condition.

The 7 Components of a Complete Plan

1. Markets You Trade

List the specific pairs or instruments you trade. Not "forex" — "EUR/USD, GBP/USD, XAU/USD."

2. Time Frames

Which time frames do you use for analysis? Which for entry? Be specific.

3. Setup Criteria

Exactly what conditions must be present for you to enter a trade? Price action pattern + indicator confirmation + trend direction = a checklist you can check off.

4. Entry Rules

Where exactly do you enter? Market order? Limit order? Stop entry?

5. Stop Loss Rules

Where does the stop go? How is it calculated? Does it trail?

6. Take Profit Rules

Fixed risk-reward? Trailing stop? Partial closes at specific targets?

7. Daily Loss Limit

At what point do you stop trading for the day? 3 consecutive losses? -2% of account? This is non-negotiable.

Put It in Writing

Write your plan down. Print it. Put it next to your monitor. Every time you're about to take a trade, check your plan. If the trade doesn't meet the criteria, you don't take it. No exceptions.

A plan you don't follow is just a wish.