Trading Plan Template: Write Your Entry, Exit and Risk Rules on One Page

A trading plan template is a fill-in document that turns your trading into written rules. It covers which markets and timeframes you trade, the exact conditions for entering and exiting, where your stop loss goes, how big each position is, and how much you can lose in a day before you stop. You fill it in once, then check every trade against it.

This matters because without written rules, your decisions get made by whatever you feel after the last trade. A plan makes those decisions at a calm moment, before any money is at risk. It also gives your journal a standard to measure you against.

Copy this trading plan template

Every line of the template answers one of three questions you must settle before risking money: when you enter, when you exit, and how much you risk.

Copy the block below, then paste it into a Word document, a spreadsheet tab or the first page of your notebook. Fill in every line. If you leave a line blank, you have not decided that part yet, so don't trade it yet.

TRADING PLAN — version 1 — date: ___

1. MY TRADING BUSINESS
  Starting capital: ___
  Money I can afford to lose: ___
  Hours I can trade per day: ___
  Which session: ___
  Process goal this month: ___
    e.g. follow every rule on 100% of trades

2. MARKETS AND TIMEFRAMES
  Pairs I trade (max 3 to start): ___
  Timeframe for direction: ___
    e.g. 4-hour
  Timeframe for entry: ___
    e.g. 1-hour
  I do NOT trade during: ___
    e.g. major news releases

3. SETUP AND INDICATORS
  Setup name: ___
  Indicators + settings: ___
  Setup is valid only if: ___

4. ENTRY RULES
  Trigger (what exactly happens): ___
  Order type: ___
    market / limit / stop

5. EXIT RULES
  Stop loss placed at: ___
  Profit target at: ___
  Trailing stop rule: ___
  Time exit (if any): ___
  I never move my stop further
  away from entry.

6. RISK AND POSITION SIZE
  Risk per trade: ___% = ___ in money
  Max leverage I use: ___
  Position size (lots) =
    risk in money
    ÷ (stop in pips × pip value per lot)

7. LIMITS
  Max loss per day: ___
    → stop trading for the day
  Max loss per week: ___
    → stop until weekly review
  Max open positions: ___

8. JOURNAL AND REVIEW
  I log every trade within ___
  of closing it.
  Weekly review day: ___
  I change at most ONE rule per review.

9. IF-THEN RULES
  If ___ happens → I ___
  If ___ happens → I ___
  If ___ happens → I ___

Section 1 is the business part of the plan. It treats trading as a small business with capital, working hours and a goal you control. "Make $500 this month" is outside your control. "Follow every rule on every trade" is not.

Here is how the template might look once filled in, using the same example numbers as the rest of this page. One term first: R is the amount you planned to risk on the trade; 1R here is $50, or 25 pips. A result in R is your profit or loss divided by that amount.

1. Starting capital: $5,000
   $5,000 is money I can afford to lose;
   I stop and review if it falls to $4,000
   Hours per day: 2
   Session: London
   Process goal: follow every rule
   on 100% of trades
2. Pairs: EUR/USD
   Direction: 4-hour   Entry: 1-hour
   No trades: 30 minutes either side
   of major news
3. Setup: trend pullback
   Indicators: 50-period moving average
   on the 4-hour chart
   Valid only if: price closes above the
   50-period moving average on the 4-hour chart
4. Trigger: a 1-hour candle closes above
   the high of the previous candle
   after a new swing low
   Order type: market
5. Stop: 5 pips below the last swing low
   First target: 1R = 25 pips above entry
   (1.1020); close half there
   Trailing stop: trail the rest behind
   each new swing low
   Time exit: none
6. Risk: 1% = $50 on a $5,000 account
   Max leverage: 10:1
   Size: $50 ÷ (25 pips × $10) = 0.20 lots
7. Max loss per day: 2% = $100
   Max loss per week: 4% = $200
   Max open positions: 1
8. Log within 15 minutes of closing;
   review Sunday; change at most one rule
9. If daily limit hit → close the platform
   If I want to move my stop away → close
   the trade instead
   If 1 loss → 15-minute break
   before the next order
   If I win several trades in a row → keep
   risk at 1%; never raise it after wins
   If a setup is not in section 3 → skip it
   Never add to a losing trade

Write rules you can check, not wishes

The most common mistake in a first plan is writing rules that can't be checked. "Enter when the trend is strong" can't be wrong, so it can't be tested either. A good rule is one where two traders reading it would take the same trade.

Use this test on every line: could you mark it yes or no in your journal after the trade? If not, rewrite it.

The chart below shows the swing-low stop rule on an example EUR/USD buy. Say the last swing low is at 1.0975. The stop goes 5 pips below it, at 1.0970. You buy at 1.0995, so the distance from entry to stop is 1.0995 − 1.0970 = 0.0025, or 25 pips. The first target, 1.1020, sits the same 25 pips above entry, which is 1R. The chart decides that distance. Your position size is then fitted to it, as the next section shows.

Stop loss placed 5 pips below the last swing low on a EUR/USD buy, with the 1R target at 1.1020Illustration

The testable versions may not be the best rules for you. That's fine. A rule you can check can be improved. A vague rule never can.

Set your risk numbers first: a worked example

Start by deciding how much loss you can tolerate. Then fix your numbers: the leverage you will use, the maximum loss per trade and the maximum loss per day. Only after that do you calculate position size.

Position size is the main lever you have against the risk of ruin, which is the chance of losing so much that you can't keep trading. The bars chart further down shows how quickly a losing streak eats into the account as your risk per trade goes up.

The figures in this example are illustrative. Say your account is $5,000 and your plan says 1% risk per trade. You want to buy EUR/USD, and your setup puts the stop 25 pips away, as in the same example chart above. That is your stop loss distance. On EUR/USD, one standard lot moves about $10 per pip. The calculation below turns those inputs into an order size.

Position size for a $5,000 account risking 1% with a 25-pip stop

Risk in money$5,000 × 1%= $50

Loss per 1 lot if the stop is hit25 pips × $10= $250

Lots to trade$50 ÷ $250= 0.20

Order size0.20 lots

Notice what this does. The stop goes where the chart says it should, and the size adjusts to fit it. If the stop had to be 50 pips away, the size would halve to 0.10 lots, and the risk would still be $50. Never shrink a stop just to trade bigger.

Same $50 risk with a 25-pip stop at 0.20 lots and a 50-pip stop at 0.10 lots

Now look at why the percentage matters so much. The chart below uses the same $5,000 account and shows what is left after 10 losing trades in a row at different risk levels. Each loss is taken from the shrinking balance.

Account left after 10 losses in a row, starting from $5,000Illustration

1% per trade

$4,522

2% per trade

$4,085

5% per trade

$2,994

10% per trade

$1,743

The arithmetic is the balance times what is left after each loss, ten times. At 1% that is $5,000 × 0.99^10 ≈ $4,522. At 10% it is $5,000 × 0.90^10 ≈ $1,743. From $1,743 you would need to almost triple the account just to get back to $5,000. A losing streak is part of normal trading, and your risk per trade decides whether you can survive one.

Why traders abandon their plan, and the if-then rules that stop it

Having a plan is not the same as following it. Plans usually break in one of a few predictable moments:

• After a loss. You want the money back now, so you take a trade that isn't in your plan, often bigger than usual.
• After a win streak. You feel the rules are holding you back and raise your risk "just this once".
• While a trade is losing. You move the stop further away because closing would mean admitting you were wrong.
• When a tempting setup appears that is not in your plan. It looks too good to miss, so you bend the rules to fit the trade you want to take.

The fix is to decide your reaction before the moment arrives. Section 9 of the filled-in example above already lists the rules. This table shows which moment each one answers:

The picture below shows the daily limit from the filled-in example at work: two −1R losses of $50 each reach the $100 limit, so the day ends there.

Daily loss limit from the example plan: two $50 losses reach −$100 and trading stops for the day

Run this pre-trade checklist before every order

This is the part of the plan you use every day. Keep it next to your screen or as the first tab of your spreadsheet. Every box must be ticked before you click buy or sell.

• The pair and timeframe are listed in my plan
• No high-impact news release is due during my trade
• My named setup is present, and every "valid only if" condition is met
• The entry trigger has actually happened (not "about to happen")
• Stop loss level is written down, in pips and in price
• Position size is calculated with the formula, not guessed
• Risk on this trade is within my per-trade limit
• Today's losses plus this trade's risk stay within my daily limit
• Profit target or trailing rule is decided before entry
• I am not trading to win back an earlier loss

If you can't tick a box, skip the trade. Missing a good trade costs you nothing. Taking an unplanned one is how small losses turn into big ones.

Journal every trade against your plan

A plan without a journal is a promise nobody checks. The journal shows you two separate things: whether your rules work, and whether you actually follow them. Those need different fixes, so record them separately.

A paper notebook works for writing down thoughts, but it gets hard to analyse once you have hundreds of trades. A spreadsheet with one row per trade solves that. You can filter, sort and total any column in seconds.

Record each result in R as well as in money, so a bigger account or a lucky size can't hide how a setup really performs. With the $50 example risk, a $50 loss is −1R and a $100 gain is +2R, as the scale below shows.

R-multiple scale for a $50 planned risk: −1R is a $50 loss, +2R is a $100 gain

Use these columns:

Once a week, total a few figures from your journal spreadsheet. Profit factor = total R won ÷ total R lost. Average R per trade = total R ÷ number of trades. Maximum drawdown is the largest fall from a balance peak, in money or in R. Then note your longest streaks of wins and losses. Put those next to your journal rows and work through the review loop below.

Weekly trading journal review loop

1. 1Collect the weekJournal rows plus the weekly totals
2. 2Filter rule breaksTotal the R from trades marked 'No'
3. 3Check the limitsDrawdown and losing streak against your plan
4. 4Change one thingOr nothing; date it in the plan
5. 5Trade the next weekSame plan, no edits mid-session

Use these decision rules in the review so you don't end up rewriting the plan on a whim:

• If the rule-break trades lost more R than the rule-following ones, your problem is discipline, not strategy. Add a checklist line and keep the setup as it is.
• If you hit your daily loss limit twice in one week, halve your risk per trade next week (for example, from 1% to 0.5%).
• If your longest losing streak times your risk per trade would break your weekly limit, your risk per trade is too high for this setup. Lower it.
• If a setup is losing while you followed every rule, decide in advance how many trades you'll judge it on (for example, 20) before you change it. A handful of trades proves nothing.

FAQ