Building a Forex Trading Plan That Actually Works

November 2024. Ryan, a 35-year-old software developer from Austin, had been trading forex for 18 months.

He’d read 12 books on trading. Watched hundreds of YouTube videos. Taken three online courses. Spent $4,500 on education.

His account balance? Down 34% overall.

During our coaching session, I asked him a simple question:

“Can I see your trading plan?”

“My what?”

“Your trading plan. The document that outlines your strategy, rules, risk management, everything.”

“Oh… I don’t really have that written down. It’s all in my head.”

There was his problem.

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I asked Ryan to describe his “strategy” from memory:

“What setups do you trade?”

“Uh, mostly support and resistance bounces. Sometimes breakouts. And… trend continuations when I see them. Oh, and sometimes reversals.”

“Which timeframes?”

“Depends. Usually 15-minute or 1-hour. Sometimes 5-minute if I’m scalping. Or 4-hour if I’m swing trading.”

“What’s your risk per trade?”

“Usually 1%. But sometimes 2% if I’m really confident. And 0.5% if I’m nervous.”

“What are your profit targets?”

“I aim for 2:1 risk-reward. Unless it looks like it’ll go further, then I let it run. Or if I’m scared, I close early.”

“Do you have maximum daily loss limits?”

“Kind of? I try to stop at 3% down. But if I think I can make it back…”

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I stopped him there.

“Ryan, you don’t have a trading plan. You have a collection of ideas you apply randomly based on how you feel.”

The look on his face told me he knew I was right.

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Here’s what Ryan was doing:

• Trading 4 different strategies inconsistently
• Using 3 different timeframes depending on mood
• Varying risk based on confidence (emotional, not logical)
• Moving targets based on fear/greed
• Breaking his own “kind of” rules regularly

No wonder he was down 34%.

It’s impossible to improve what you can’t measure. And you can’t measure what isn’t defined.

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Two months later, Ryan had a completely different approach.

He showed me a 12-page document: His trading plan.

It included:

• ONE specific strategy (not four)
• Exact entry criteria (7 checkboxes that MUST be met)
• Precise risk management rules (1% per trade, no exceptions)
• Defined trading hours (8-11 AM EST only)
• Maximum loss limits (3% daily, 6% weekly)
• Position management rules (when to move stops, take profit)
• Journal requirements (every trade logged)
• Monthly review process

“I followed this plan for 60 days without deviation,” he told me.

Results:

• 60 trades taken
• Win rate: 58%
• Average risk-reward: 1:2.3
• Account: +14.7%

Same trader. Same knowledge. Different approach.

The difference? A written, specific, enforceable trading plan.

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This comprehensive guide will teach you:

By the end, you’ll have:

• A complete understanding of what a trading plan must include
• Templates you can customize for your situation
• Specific examples from profitable traders
• How to test and refine your plan
• Common mistakes to avoid
• A finished, actionable document you can start using tomorrow

Warning: This is WORK. Creating a real trading plan takes 4-8 hours. Most traders won’t do it (which is why most traders fail).

But if you’re serious about treating trading like a business rather than a hobby, this is non-negotiable.

Ryan wished he’d done this 18 months earlier. It would have saved him $2,340 in losses and countless hours of frustration.

Let’s build you a plan that actually works.

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Part 1: Why Most Traders Don’t Have Plans (And Why You Need One)

The “I’ll Figure It Out As I Go” Myth

What beginners think:

“I don’t need a written plan. I know what I’m doing. I’ll just trade based on what I see.”

What actually happens:

Monday: Trades support bounces on 1H chart
Result: 2 wins, 1 loss (+$80)
Brain: "This strategy is great!"

Tuesday: Sees breakout setup, takes it
Result: Loss (-$50)
Brain: "Maybe I should trade breakouts instead?"

Wednesday: Tries trend following
Result: Loss (-$50)
Brain: "Back to support/resistance"

Thursday: Support bounce setup appears
Result: Loss (-$50)
Brain: "This stopped working. Let me try something else..."

Friday: Tries 5-minute scalping
Result: 8 trades, 3 wins, 5 losses (-$120)

Week result: -$190
Actual problem: NO CONSISTENT STRATEGY
Perceived problem: "I need a better strategy"

Without a plan:

• You’re not testing one strategy
• You’re randomly trying many strategies
• Impossible to know what works
• Impossible to improve
• Guaranteed inconsistency

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What a Trading Plan Actually Is

Definition:

A trading plan is a comprehensive written document that defines:

• WHAT you trade (specific setups)
• WHEN you trade (sessions, days, hours)
• HOW you trade (entry, exit, management rules)
• HOW MUCH you risk (position sizing, limits)
• HOW you measure success (metrics, goals)
• HOW you improve (review process)

Think of it as:

• Business plan for your trading business
• Instruction manual you follow
• Rulebook that removes emotion
• Filter that prevents bad decisions

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The Benefits of a Written Plan

Benefit #1: Removes Emotional Decisions

Without plan:

Trade setup appears
Brain: "Should I take this?"
Fear: "What if it loses?"
Greed: "What if I miss it?"
Hope: "Maybe it'll work?"

Result: Decision based on emotion

With plan:

Trade setup appears
Check plan criteria:
□ Does it match Setup A? No
□ Does it match Setup B? Yes
□ All 7 criteria met? Yes

Result: Take trade (no emotion, just execution)

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Benefit #2: Creates Consistency

With plan:
Month 1: Trade Setup A, 45 times
Month 2: Trade Setup A, 52 times
Month 3: Trade Setup A, 48 times

Result: 145 samples of SAME strategy
Can analyze: "Setup A wins 62% with 1:2.1 R:R"
Can improve: "Setup A works better during London session"

Without plan:
Month 1: 15 different setups
Month 2: 20 different setups
Month 3: 18 different setups

Result: No useful data
Can't analyze anything
Can't improve systematically

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Benefit #3: Enables Improvement

You can only improve what you can measure.

With plan:

"My plan says: Trade pin bars at support
Tracked 50 trades
Win rate: 55%
Average R:R: 1:1.8

Analysis: Win rate is good, but R:R is low
Adjustment: Let winners run longer (target 1:2.5)

Next 50 trades:
Win rate: 53% (slightly lower)
Average R:R: 1:2.4 (significantly better)

Net result: MORE profitable despite lower win rate"

Without plan:

"I trade... stuff. Sometimes I win, sometimes I lose.
Not sure why. Can't identify patterns.
Can't improve because nothing to improve.
Just keep trying random things."

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Benefit #4: Protects You From Yourself

The plan is a contract with yourself:

"When I'm emotional, I will NOT make decisions.
I will ONLY follow the plan.
The plan was created when I was rational.
The plan is smarter than emotional me.
I will trust the plan over my feelings."

Real example from Ryan:

Before plan:

After 3 losses: "Let me try this OTHER thing!"
Result: More losses

After plan:

After 3 losses: Check plan: "My plan says: 
'After 3 losses, take 30-minute break, 
then continue SAME strategy.'
I will do this."
Result: Follows proven strategy, recovers

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Benefit #5: Makes You Accountable

Plan = Standard to measure against

End of day review:
"Did I follow my plan today?"

If YES:
- Good day (regardless of P/L)
- Celebrate discipline
- Continue tomorrow

If NO:
- Bad day (regardless of P/L)
- Identify where broke rules
- Understand why
- Commit to better tomorrow

Success = Following plan
Failure = Breaking plan

P/L is just feedback on whether plan works

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Why Traders Resist Creating Plans

Excuse #1: “It takes too long”

Reality: 4-8 hours to create vs. YEARS of inconsistent results

What’s more expensive?

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Excuse #2: “I like to be flexible”

Translation: “I like to do whatever I feel like”

Reality: Flexibility = Inconsistency = Losses

Professional traders have RIGID plans. That’s why they’re professional.

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Excuse #3: “I already know what I’m doing”

Test: Can you explain your entire strategy to someone in writing right now?

If no → You don’t “know what you’re doing,” you have vague ideas

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Excuse #4: “Plans are boring”

Reality: Blowing your account is also boring. And expensive.

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Excuse #5: “What if I need to change the plan?”

Answer: Plans are reviewed and updated monthly/quarterly

They’re not permanent tattoos

But you need SOMETHING written before you can improve it

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The Trading Plan Success Rate

Traders WITHOUT written plans:

• Success rate: ~10-20%
• Average time to profitability: Never (most quit)
• Consistency: Non-existent

Traders WITH written plans:

• Success rate: ~40-50%
• Average time to profitability: 12-18 months
• Consistency: Developing then established

Plans don’t guarantee success.

But lack of plan guarantees inconsistency.

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Part 2: The 10 Essential Components of a Trading Plan

Every trading plan must include these 10 sections:

Component #1: Trading Philosophy and Goals

What this is: Your “why” and what you’re trying to achieve

What to include:

Why am I trading?
- Not "to get rich quick"
- Real reason: Financial freedom, supplement income, passion, etc.

What are my goals?
Short-term (3-6 months):
- Example: "Achieve consistent 3-5% monthly returns"
- Example: "Build account from $5K to $6K"

Medium-term (1-2 years):
- Example: "Grow account to $25K"
- Example: "Quit day job and trade full-time"

Long-term (3-5 years):
- Example: "Generate $100K annual income from trading"
- Example: "Build $500K trading account"

What is my trading approach?
- Conservative (focus on capital preservation)
- Moderate (balanced risk/reward)
- Aggressive (higher risk for faster growth)

How much time can I dedicate?
- Full-time (6+ hours/day)
- Part-time (2-4 hours/day)
- Minimal (1 hour/day or swing trading)

Ryan’s Example:

WHY: Supplement income, eventually replace salary, love markets

GOALS:
3-month: Consistent 3% monthly, build discipline
1-year: Grow $10K account to $15K (50%)
3-year: Trade full-time, $100K/year income

APPROACH: Moderate (1% risk per trade)

TIME: Part-time (8-11 AM EST before work)

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Component #2: Market and Instrument Selection

What this is: What you trade and why

What to include:

Which pairs will I trade?
- Primary pair: (Example: EUR/USD)
  Why: Highest liquidity, tightest spreads, most education available

- Secondary pair: (Example: GBP/USD)
  Why: High volatility, good for momentum strategies

- Tertiary pair: (Example: USD/JPY)
  Why: Diversification, different dynamics

Which pairs will I AVOID?
- Exotic pairs (USD/TRY, USD/ZAR) - too volatile
- GBP/JPY - volatility beyond my risk tolerance
- Any pair I don't understand

Which trading sessions?
- Primary: London/NY overlap (8 AM-12 PM EST)
  Why: Highest liquidity for my pairs

- Secondary: London session (3-8 AM EST)
  Why: EUR/USD and GBP/USD most active

- Avoid: Asian session (7 PM-4 AM EST)
  Why: Low liquidity for my pairs

Which days of week?
- Best: Tuesday-Thursday (highest volume)
- Acceptable: Monday, Friday morning
- Avoid: Friday after 12 PM EST (position squaring)

Ryan’s Example:

PRIMARY PAIR: EUR/USD
- Reason: Most liquid, tightest spreads, best for my strategy

SECONDARY: None (focus mastery on one pair first)

AVOID: All others until profitable on EUR/USD

SESSION: London/NY overlap (8-11 AM EST)
- Fits my schedule (before 12 PM work start)
- Peak liquidity for EUR/USD

DAYS: Tuesday-Thursday focus
Monday: Observe only
Friday: Close all by 11 AM

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Component #3: Strategy and Setup Definition

What this is: EXACTLY what setups you trade

This is the most important section. Be SPECIFIC.

What to include:

STRATEGY NAME: [Give it a name]

STRATEGY TYPE: 
- Trend following
- Range trading
- Breakout
- Reversal

TIMEFRAMES:
- Analysis timeframe: (Example: Daily for trend)
- Entry timeframe: (Example: 1H for entries)
- Management timeframe: (Example: 15M for adjustments)

SETUP #1: [Specific name]

Entry Criteria (ALL must be met):
□ Criterion 1: (Example: Price at key support level)
□ Criterion 2: (Example: Bullish pin bar forms on 1H)
□ Criterion 3: (Example: Pin bar low within 5 pips of support)
□ Criterion 4: (Example: Daily trend is bullish)
□ Criterion 5: (Example: No major resistance within 50 pips above)
□ Criterion 6: (Example: Volume increasing on pin bar)
□ Criterion 7: (Example: London or NY session)

Entry Trigger:
"When all 7 criteria met, enter BUY at [specific price]"

Stop Loss Placement:
"Place stop 5 pips below pin bar low"

Take Profit:
"Target 1: 2:1 risk-reward (close 50%)
Target 2: 3:1 risk-reward (close remaining 50%)"

Position Management:
"When price reaches Target 1:
- Close 50% of position
- Move stop to breakeven on remaining"

SETUP #2: [If you have another setup]
[Same detailed format]

Ryan’s Setup Example:

STRATEGY: Support Bounce Reversal

TYPE: Counter-trend reversal at support

TIMEFRAMES:
- Daily: Identify support zones
- 1H: Entry signals
- 15M: Monitor during trade

SETUP: Pin Bar at Support

ENTRY CRITERIA (ALL must be met):
□ 1. Daily support level identified (tested 2+ times)
□ 2. Price approaches within 10 pips of support
□ 3. Bullish pin bar forms on 1H chart
□ 4. Pin bar wick is 2x body size minimum
□ 5. Pin bar low within 5 pips of support
□ 6. Close of pin bar above 50% of total range
□ 7. Trading during 8-11 AM EST

ENTRY TRIGGER:
Enter BUY 2 pips above pin bar high

STOP LOSS:
3 pips below pin bar low

TAKE PROFIT:
TP1: 2R (close 50% position)
TP2: 3R (close remaining 50%)

MANAGEMENT:
At TP1: Move stop to breakeven
At 1.5R: Move stop to +0.5R (lock profit)

EXAMPLE TRADE:
Support: 1.0800
Pin bar: Low 1.0798, High 1.0818, Close 1.0815
Entry: 1.0820
Stop: 1.0795 (25 pips)
TP1: 1.0870 (50 pips, 2R)
TP2: 1.0920 (100 pips, 4R from entry but 3R from TP1 adjustment)

Note: This level of specificity eliminates all guesswork

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Component #4: Risk Management Rules

What this is: How you protect your capital

What to include:

Risk Per Trade:
"I will risk exactly ___% per trade"
(Example: 1%)

Maximum Position Size:
"Never exceed ___ lots total"
(Example: 0.50 lots on $10K account)

Position Sizing Calculation:
"Lot size = (Account × Risk%) / (Stop pips × pip value)"
Show worked example

Daily Loss Limit:
"I will stop trading after losing ___% in one day"
(Example: 3%)
"After hitting limit: Close platform, done for day"

Weekly Loss Limit:
"I will stop trading after losing ___% in one week"
(Example: 6%)
"After hitting limit: No trading until Monday"

Monthly Loss Limit:
"After losing ___% in one month, I will:"
(Example: 10%)
"- Stop live trading
- Review entire strategy
- Paper trade for 2 weeks
- Identify problems
- Make necessary adjustments"

Maximum Concurrent Positions:
"Never have more than ___ positions open"
(Example: 2 positions maximum)

Correlation Risk:
"Will not open correlated positions (EUR/USD + GBP/USD)"
"Maximum total risk across all positions: ___"
(Example: 2% total)

Stop Loss Rules:
"- Set stop BEFORE entering trade
- NEVER move stop to increase loss
- NEVER remove stop loss
- Only move stop to breakeven or profit"

Leverage:
"Maximum leverage used: ___:1"
(Example: 1:100, but will only use 10% of available)

Ryan’s Example:

RISK PER TRADE: 1% (always)

POSITION SIZE: Calculated per trade based on stop distance

DAILY LIMIT: 3% loss = Stop trading
Action: Close platform, done for day, journal what happened

WEEKLY LIMIT: 6% loss = Stop until Monday
Action: Weekend review of all trades, identify patterns

MONTHLY LIMIT: 10% loss = Halt live trading
Action: Paper trade 2 weeks, strategy review, possible mentor

MAX POSITIONS: 1 at a time (until consistently profitable)

CORRELATION: N/A (only trading EUR/USD currently)

STOP LOSS RULES:
- Set stop immediately after entry
- NEVER move to increase loss (account killer)
- Move to breakeven at +25 pips
- Move to +10 pips profit at +40 pips

LEVERAGE: 1:100 available, typically use 10-15% maximum

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Component #5: Trading Schedule and Routine

What this is: When and how you trade

What to include:

TRADING HOURS:
Monday: [Time range and activity]
Tuesday: [Time range and activity]
Wednesday: [Time range and activity]
Thursday: [Time range and activity]
Friday: [Time range and activity]
Weekend: [Review activities]

PRE-MARKET ROUTINE (Before trading):
Time: [When you start prep]
Activities:
1. [Example: Review overnight news]
2. [Example: Check economic calendar]
3. [Example: Identify support/resistance]
4. [Example: Mark potential setups]
5. [Example: Mental preparation]

Duration: [How long]

DURING MARKET ROUTINE:
- How often check charts: [Example: Every 15 minutes]
- How monitor trades: [Example: Alerts set, not watching]
- Break schedule: [Example: 15 min break every 2 hours]

POST-MARKET ROUTINE:
Activities:
1. [Example: Journal all trades]
2. [Example: Calculate daily P/L]
3. [Example: Update statistics]
4. [Example: Screenshot key setups]
5. [Example: Plan tomorrow]

Duration: [How long]

WEEKLY REVIEW:
When: [Example: Saturday 9-11 AM]
Activities:
1. Review all week's trades
2. Calculate weekly stats
3. Identify patterns (wins/losses)
4. Check adherence to plan
5. Set goals for next week

MONTHLY REVIEW:
When: [Example: Last Sunday of month]
Activities:
1. Calculate monthly metrics
2. Strategy performance analysis
3. Psychological review
4. Plan adjustments if needed
5. Set next month's goals

Ryan’s Example:

MONDAY: 7:30-11:30 AM
7:30-8:00: Pre-market routine
8:00-11:00: Active trading
11:00-11:30: Close, journal, prep tomorrow

TUESDAY-THURSDAY: Same as Monday

FRIDAY: 7:30-11:00 AM
(Close all positions by 11 AM, no afternoon trading)

WEEKEND:
Saturday 9 AM: Weekly review (1 hour)
Sunday 7 PM: Next week prep (30 min)

PRE-MARKET ROUTINE (7:30-8:00 AM):
1. Check economic calendar (any news 8-11 AM?)
2. Review daily chart (trend, S/R levels)
3. Mark key levels on 1H chart
4. Set alerts for potential setups
5. Mental prep: "I will follow my plan today"

DURING MARKET:
- Check charts every 15 minutes
- If alert triggers, evaluate setup
- Set trade, walk away
- Check 15M chart for management
- Take break after each trade (5-10 min)

POST-MARKET (11:00-11:30 AM):
1. Journal every trade (5 min each)
2. Update tracking spreadsheet
3. Calculate daily P/L and check limits
4. Screenshot any interesting setups
5. Brief note: "What went well / improve tomorrow"

WEEKLY REVIEW (Saturday 9-10 AM):
1. Stats: Win rate, R:R, total P/L
2. Best/worst trades - why?
3. Emotional patterns identified
4. Plan adherence score (1-10)
5. Next week focus area

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Component #6: Trade Management Rules

What this is: How you manage positions once entered

What to include:

ENTRY MANAGEMENT:
"After entering trade:
1. Set stop loss immediately
2. Set take profit target(s)
3. Set alert for TP1
4. Walk away from screen
5. Check every ___ minutes"

STOP LOSS MANAGEMENT:
"Move stop to breakeven when:
- Price reaches ___R profit"
(Example: +1R or +20 pips)

"Trail stop when:
- Price reaches ___R profit
- Method: ATR trailing / fixed pips / structure"

"NEVER move stop to increase loss"

TAKE PROFIT MANAGEMENT:
"Target 1 (___% of position):
- At ___R
- MUST close, no exceptions"

"Target 2 (remaining ___% of position):
- At ___R
- Or trail until stopped"

"If considering closing early:
- Only if plan criteria met
- Not due to fear/greed"

PARTIAL POSITION CLOSING:
"When Target 1 hit:
- Close ___% of position
- Move stop on remaining to ___"

WEEKEND POSITIONS:
"Friday rules:
- Close all positions by ___ time
OR
- Accept weekend gap risk
- Use guaranteed stops if holding"

NEWS EVENT MANAGEMENT:
"Before high-impact news:
- Close all positions ___ minutes before
OR
- Widen stops to ___ pips
- Reduce position size to ___"

Ryan’s Example:

ENTRY:
1. Enter at planned price (2 pips above pin bar)
2. Set stop immediately (3 pips below pin low)
3. Set TP1 alert at 2R
4. Set TP2 alert at 3R
5. Close chart, set timer for 15 min

STOP MANAGEMENT:
- At +25 pips: Move stop to breakeven (entry price)
- At +40 pips: Move stop to +10 pips
- At TP1 (2R): Move stop to +1.5R on remaining position

NEVER move stop wider than original placement

TAKE PROFIT:
TP1 at 2R: Close 50% of position automatically
TP2 at 3R: Close remaining 50%

If price action suggests more: Let runner continue but trail stop

WEEKEND RULE:
Friday 11 AM: CLOSE ALL POSITIONS
No weekend holding (avoid gap risk)
Exceptions: None

NEWS EVENTS:
Before high-impact news (NFP, FOMC):
- Close positions 30 minutes before
- Or accept risk and don't watch
Never trade immediately after news (wait 10 min for volatility to settle)

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Component #7: Record Keeping and Journaling

What this is: How you track and learn

What to include:

TRADE JOURNAL FORMAT:
For EVERY trade, record:

Pre-Trade:
□ Date/Time
□ Pair
□ Setup type
□ Entry criteria checklist (all met?)
□ Entry price
□ Stop loss price
□ Take profit price(s)
□ Position size
□ Risk $ amount
□ Risk %
□ Potential reward $
□ Risk:Reward ratio
□ Screenshot of setup
□ Pre-trade emotional state (1-10 scale)
□ Confidence level (1-10)

During Trade:
□ Any management actions (stops moved, partials closed)
□ Emotional state during trade
□ Temptations (close early, move stop, etc.)

Post-Trade:
□ Exit price
□ Exit reason (TP hit, SL hit, manual close)
□ Pips gained/lost
□ $ gained/lost
□ R gained/lost (in terms of risk units)
□ Follow plan? (Y/N - if No, why?)
□ Lessons learned
□ Rating of execution (1-10)
□ Post-trade emotional state

PERFORMANCE METRICS TO TRACK:
Daily:
- Number of trades
- Wins/Losses
- Win rate %
- Total pips
- Total $ P/L
- Largest win/loss
- Followed plan %

Weekly:
- All daily metrics aggregated
- Average R per trade
- Average win size
- Average loss size
- Best day / Worst day
- Emotional patterns identified

Monthly:
- All weekly metrics aggregated
- Return on account (%)
- Sharpe ratio (if advanced)
- Maximum drawdown
- Recovery time from drawdowns
- Strategy effectiveness by setup type
- Time-of-day performance
- Best/worst trading days

REVIEW SCHEDULE:
Daily: 10 minutes after market close
Weekly: 1 hour (Saturday morning)
Monthly: 2 hours (last weekend of month)

Ryan’s Journal Template:

TRADE LOG ENTRY:

Date: 2024-11-15
Time: 9:35 AM EST
Pair: EUR/USD
Setup: Pin Bar at Support

PRE-TRADE:
Entry Criteria:
☑ Daily support at 1.0800
☑ Pin bar on 1H chart
☑ Wick 3x body size
☑ Low within 5 pips of support (1.0798)
☑ Close above 50% range
☑ Trading during 8-11 AM EST
☑ No major resistance nearby

Entry: 1.0820
Stop: 1.0795 (25 pips)
TP1: 1.0870 (50 pips, 2R)
TP2: 1.0920 (100 pips, 4R)
Position: 0.40 lots
Risk: $100 (1% of $10,000)
Reward potential: $200-$400
R:R: 1:2 to 1:4

Emotional state: 6/10 (calm, slight nervousness)
Confidence: 8/10 (strong setup)

DURING:
9:50 AM: Price +15 pips, tempted to close early
Action: Reviewed plan, kept position open ✓
10:35 AM: TP1 hit at 1.0870
Action: Closed 50%, moved stop to breakeven ✓

POST-TRADE:
11:20 AM: TP2 hit at 1.0920
Exit: 50% at 1.0870 (+50 pips), 50% at 1.0920 (+100 pips)
Total: +75 pips average
Result: +$300 (+3% account)
R gained: +3R

Followed plan: YES ✓
Execution rating: 9/10
Post-trade emotion: 7/10 (satisfied, not overconfident)

Lessons:
- Setup worked exactly as expected
- Resisting urge to close early paid off
- Moving stop to BE at TP1 removed stress
- Patience rewarded

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Component #8: Psychological Rules and Triggers

What this is: How you manage your mental game

What to include:

EMOTIONAL STATE TRACKING:
"Before each trading session, rate emotional state:
1-3: Poor (stressed, anxious, desperate) = NO TRADING
4-6: Acceptable (calm, neutral) = Trade normally
7-9: Confident (focused, clear) = Trade normally
10: Overconfident (invincible feeling) = CAUTION or skip

If below 4: Do not trade today"

RED FLAG EMOTIONS:
"If I feel these during trading, STOP IMMEDIATELY:

- Desperate to make money back
- Angry at market
- Invincible / can't lose
- Bored / need action
- Scared of every trade
- Frustrated with losing streak

Action when red flag appears:
1. Close platform
2. Take 30-minute break
3. Physical activity (walk, exercise)
4. Return only when state 4-6"

LOSS MANAGEMENT:
"After 1 loss:
- Normal, continue

After 2 consecutive losses:
- 10-minute break
- Review both trades
- Verify followed plan
- Continue if plan followed

After 3 consecutive losses:
- 30-minute MANDATORY break
- Leave trading space entirely
- Physical reset activity
- Return only when calm

After hitting daily limit:
- DONE for day
- No exceptions
- Close platform
- Journal what happened"

WIN MANAGEMENT:
"After big win (+3%+ in single trade):
- Take 15-minute break
- Avoid overconfidence
- Do NOT increase risk
- Next trade = same process

After 5 consecutive wins:
- Check for overconfidence
- Remind: 'Market will humble me'
- Maintain exact same risk
- Extra vigilant on next trade"

TILT PREVENTION:
"Signs I'm on tilt:
- Taking trades outside my setups
- Increasing position sizes
- Moving stops to avoid losses
- Overtrading (>3 trades/day for my strategy)
- Revenge trading
- Checking P/L every minute

If 2+ signs present:
= STOP TRADING IMMEDIATELY"

DECISION FATIGUE:
"Maximum trades per day: ___
(Example: 3 trades)

After reaching limit:
- Stop looking for setups
- Preserve mental energy
- Tomorrow is another day"

AFFIRMATIONS:
"Daily reminders to self:

Before trading:
'I will follow my plan regardless of outcome'
'One trade means nothing'
'I am in control of my actions only'

During losing streak:
'Losses are part of trading'
'My edge plays out over

100+ trades’ ‘I trust my process’

During winning streak: ‘I am not a genius’ ‘The market will humble overconfidence’ ‘Same discipline as always'”

**Ryan's Psychological Framework:**

EMOTIONAL STATE CHECK (Every morning): Rate 1-10: 1-3 = No trading (stressed, desperate, anxious) 4-6 = Trade normally 7-9 = Trade normally 10 = DANGER (overconfident)

Today’s state: ___ (must be 4+ to trade)

RED FLAGS (Stop immediately if feeling): □ “I NEED to make money back” □ Angry at market/broker □ “I can’t lose today” □ Bored, need action □ Frustrated, forcing trades

Action: Close platform, 30-min walk, return when 4-6 state

LOSS PROTOCOL: 1 loss: Normal, continue 2 losses: 10-min break, verify plan followed 3 losses: 30-min MANDATORY break, leave room Daily limit hit: DONE for day, journal

WIN PROTOCOL: Big win (+3%): 15-min break, remind “stay humble” 5 wins streak: Extra vigilant, check overconfidence

TILT INDICATORS (2+ = STOP): □ Trades outside my setup □ Increased position size □ Moved stop to avoid loss □ >3 trades in one day □ Revenge trading thoughts □ Checking P/L constantly

MAX TRADES/DAY: 3 (then stop) Reason: Preserve mental energy, avoid overtrading

DAILY AFFIRMATIONS: Morning: “I follow my plan. Results don’t control me.” After loss: “One trade is meaningless. Process over outcome.” After win: “I’m not special. Market will humble me if careless.”

---

### **Component #9: Continuous Improvement Process**

**What this is:** How you evolve and improve

**What to include:**

WEEKLY REVIEW PROCESS: “Every Saturday, 1 hour:

1. Performance Metrics:

• Win rate this week: ___%
• Average R:R: ___
• Total R gained: ___
• Account change: ___%
• Best trade / Worst trade

2. Execution Analysis:

• Followed plan: ___% of trades
• What went well?
• What needs improvement?
• Any rule breaks? Why?

3. Pattern Recognition:

• Do certain setups work better?
• Best time of day?
• Best day of week?
• Emotional patterns affecting trades?

4. Next Week Goals:

• Specific focus area
• One thing to improve
• One thing to maintain”

MONTHLY REVIEW PROCESS: “Last Sunday of month, 2 hours:

1. Statistical Analysis:

• Monthly win rate
• Monthly R:R
• Total return %
• Drawdown analysis
• Recovery time

2. Strategy Effectiveness:

• Is my strategy profitable?
• Win rate acceptable? (need 40%+ minimum)
• R:R acceptable? (need 1.5:1+ minimum)
• Should anything change?

3. Psychology Review:

• Emotional control rating (1-10)
• Most common emotional trap
• Improvement in discipline
• Areas still struggling

4. Plan Adjustments:

• Does plan need modification?
• What’s working? (keep)
• What’s not working? (adjust)
• New lessons learned to add?

5. Next Month Planning:

• Goals for next month
• Focus area
• Any strategy tweaks to test”

QUARTERLY DEEP DIVE: “Every 3 months, half day:

Complete analysis of 100+ trades:

• Which setups most profitable?
• Time/day patterns?
• Optimal risk:reward?
• Psychological improvements?
• Major lessons learned?
• Strategy overhaul needed?”

TESTING NEW IDEAS: “If I want to test something new:

1. NEVER test with live money first
2. Backtest minimum 100 setups
3. Forward test on demo 50 trades
4. If profitable, add to plan
5. Start with small size on live

Do NOT:

• Add random new setups mid-month
• Test with real money
• Change strategy after one bad week”

MENTOR/COMMUNITY: “Monthly:

• Share trades with mentor/community
• Get external feedback
• Learn from others’ mistakes
• Stay accountable”

**Ryan's Improvement Framework:**

WEEKLY REVIEW (Saturdays 9-10 AM):

1. Numbers: Win rate: ___ Avg R:R: ___ Total R: ___ Account %: ___
2. Execution: Plan adherence: ___/10 Wins: List best trade + why Losses: List worst trade + lesson
3. Patterns: Best time: ___ Worst time: ___ Emotional issue: ___
4. Next week: One improvement: ___ One maintain: ___

MONTHLY REVIEW (Last Sunday, 1-3 PM):

1. Full Stats:
   • 30-day win rate
   • 30-day R:R
   • Monthly return %
   • Max drawdown
   • Recovery time
2. Strategy Check: Is pin-bar-at-support still working? Y/N Win rate adequate? (need 50%+) R:R good? (need 2:1+) Changes needed? ___
3. Psychology: Emotional control: ___/10 Biggest challenge: ___ Most improvement: ___ Still working on: ___
4. Adjustments: Keep: ___ Change: ___ Add: ___ Remove: ___
5. Next Month: Goal: ___ Focus: ___

QUARTERLY REVIEW (Every 3 months): Complete deep-dive analysis 100+ trade sample Consider strategy overhaul if needed Adjust risk parameters if account grown significantly

---

### **Component #10: Contingency Plans**

**What this is:** What to do when things go wrong

**What to include:**

DRAWDOWN PROTOCOL: “If account down 5%:

• Review last 20 trades
• Identify problem
• Adjust if needed
• Continue with same risk”

“If account down 10%:

• STOP live trading
• Paper trade 1 week
• Review entire strategy
• Find systematic issue
• Resume when identified and fixed”

“If account down 20%:

• STOP live trading immediately
• Paper trade 1 month
• Complete strategy overhaul
• Consider getting mentor
• Don’t return to live until consistently profitable on demo”

LOSING STREAK PROTOCOL: “10 consecutive losses:

• Review all 10 trades
• Did I follow plan? If yes, variance is normal
• If no, fix discipline
• Reduce risk to 0.5% for next 10 trades
• Rebuild confidence slowly”

WINNING STREAK PROTOCOL: “10 consecutive wins:

• Do NOT increase risk
• Check for overconfidence
• Extra vigilant
• Expect reversion (losing streak coming)
• Maintain exact same process”

LIFE EVENTS: “If experiencing:

• Major stress (family, health, work)
• Emotional turmoil
• Sleep deprivation
• Any significant life change

Action: STOP TRADING until resolved Trading requires mental clarity Don’t trade when compromised”

ACCOUNT GROWTH: “When account grows by 50%:

• Adjust position sizes (still 1% risk)
• Consider withdrawing profits
• Reassess goals
• Same strategy, just larger size”

STRATEGY NOT WORKING: “If strategy loses money 3 months straight:

• Something is wrong
• Don’t keep doing same thing
• Options:
  1. Different strategy
  2. Different pairs
  3. Different timeframe
  4. Get professional help”

TECHNOLOGY FAILURES: “If broker down / internet out / platform crashes:

• Have backup broker account funded
• Know broker phone number for emergencies
• Have mobile trading app installed
• Close all trades immediately if can’t manage”

BROKER ISSUES: “If broker seems problematic:

• Excessive slippage
• Constant requotes
• Suspicious stop hunting
• Withdrawal issues

Action: Withdraw funds, change brokers immediately Don’t ignore red flags”

**Ryan's Contingency Plans:**

DRAWDOWN: -5%: Review trades, identify issue, continue -10%: STOP live, demo 1 week, fix problem -20%: STOP live, demo 1 month, strategy overhaul

LOSING STREAKS: 5 losses straight: Normal variance, continue 10 losses straight: Full review, reduce risk to 0.5% 15 losses straight: Strategy not working, need help

WINNING STREAKS: 5+ wins: Stay humble, same process 10+ wins: Extra careful, expect reversion

LIFE STRESS: If stressed/sick/major life event: = STOP TRADING until resolved Example: If sick, no trading that week

ACCOUNT GROWTH: Every time account grows 25%:

• Recalculate position sizes
• Withdraw 50% of profits
• Reassess goals

STRATEGY FAILURE: If losing 3 months straight: = Strategy broken, need new approach Won’t keep doing same thing expecting different results

TECH BACKUP: Backup broker: Interactive Brokers (funded with $500) Phone: Keep charged with broker number saved Mobile app: Downloaded and logged in Emergency: Close trades via phone if platform fails

BROKER RED FLAGS: Watch for:

• Stops hit 2-3 pips worse regularly
• Requotes on entries
• Withdrawal delays

If 2+ issues: Withdraw and switch immediately

---

## **Part 3: Template and Real Example

**Let's see Ryan's complete final plan:**

---

### **Ryan's Complete Trading Plan**

FOREX TRADING PLAN Ryan Miller Created: September 2024 Last Updated: November 2024

SECTION 1: TRADING PHILOSOPHY

Why I Trade:

• Supplement income from software job
• Build toward financial independence
• Eventually trade full-time (3-5 year goal)
• Passion for markets and analysis

Goals: 3-month: Consistent 3% monthly, build iron discipline 1-year: Grow $10K to $15K (50% growth) 3-year: $50K account, $3K/month income, quit day job

Approach: Moderate risk (1% per trade) Time Available: Part-time mornings (8-11 AM EST)

SECTION 2: WHAT I TRADE

Primary Pair: EUR/USD ONLY Reason: Most liquid, tightest spreads, most learning resources

Secondary Pairs: NONE (until consistently profitable)

Avoid: All other pairs, all exotic pairs

Session: London/NY overlap (8-11 AM EST) Reason: Peak liquidity, fits my schedule

Days: Tuesday-Thursday (best) Monday: Observe only (slow start) Friday: Close all by 11 AM (weekend risk)

SECTION 3: MY STRATEGY

Strategy: “Pin Bar Support Bounce” Type: Counter-trend reversal at support Timeframes: Daily (context), 1H (entry), 15M (management)

SETUP CRITERIA (ALL must be met): ☑ Daily support identified (tested 2+ times previously) ☑ Price within 10 pips of support ☑ Bullish pin bar forms on 1H chart ☑ Pin bar wick minimum 2x body size ☑ Pin bar low within 5 pips of support level ☑ Pin bar closes above 50% of its range ☑ Trading between 8-11 AM EST ☑ No major resistance within 50 pips above

ENTRY: Enter BUY 2 pips above pin bar high

STOP LOSS: 3 pips below pin bar low

TAKE PROFIT: TP1: 2R (close 50% of position) TP2: 3R (close remaining 50%)

POSITION MANAGEMENT:

• At TP1: Close 50%, move stop to breakeven
• At 1.5R: Move stop to +0.5R (lock in profit)

SECTION 4: RISK MANAGEMENT

Risk Per Trade: 1% (ALWAYS, no exceptions)

Position Size: Calculated per trade Formula: (Account × 1%) / (Stop pips × $1) Example: ($10,000 × 0.01) / (25 pips × $1) = 0.40 lots

Daily Loss Limit: 3% Action: Hit limit = Close platform, done for day

Weekly Loss Limit: 6% Action: Hit limit = No trading until Monday

Monthly Loss Limit: 10% Action: Hit limit = Stop live trading, paper trade 2 weeks, strategy review

Maximum Concurrent Positions: 1 (Focus on one quality trade at a time)

Stop Loss Rules:

• Set BEFORE entering
• NEVER move to increase loss
• Only move to breakeven or profit

Leverage: 1:100 available, typically use only 10-15%

SECTION 5: TRADING SCHEDULE

MONDAY-THURSDAY: 7:30-8:00 AM: Pre-market routine

• Check economic calendar
• Mark daily support/resistance
• Identify potential setups
• Mental prep

8:00-11:00 AM: Active trading

• Watch for pin bar setups
• Maximum 3 trades
• 10-min break after each trade

11:00-11:30 AM: Post-market

• Journal all trades
• Update statistics
• Close platform

FRIDAY: Same as above, but close ALL positions by 11:00 AM No afternoon trading

SATURDAY: 9:00-10:00 AM: Weekly review

• Calculate statistics
• Review all trades
• Identify patterns
• Plan next week

SUNDAY: 7:00-7:30 PM: Week prep

• Review economic calendar
• Mark key levels
• Mental preparation

SECTION 6: TRADE MANAGEMENT

Entry Process:

1. Setup meets all 8 criteria
2. Enter 2 pips above pin bar high
3. Set stop 3 pips below pin bar low
4. Set TP1 and TP2 alerts
5. Close chart, check in 15 minutes

Stop Management:

• At +25 pips: Move to breakeven
• At +40 pips: Move to +10 pips
• At TP1: Move to +1.5R on remaining position
• NEVER move wider

Take Profit:

• TP1 (2R): MUST close 50%
• TP2 (3R): Close remaining 50%
• No exceptions, no “let me wait”

Weekend Rule: Friday 11 AM = ALL POSITIONS CLOSED No weekend holding, no exceptions

News Events: Close 30 minutes before high-impact news OR accept risk Never trade immediately after news (10-min settling period)

SECTION 7: JOURNALING

For EVERY Trade:

• Date, time, pair
• Setup type
• All 8 criteria checklist
• Entry, stop, target
• Position size, risk $
• Screenshot
• Emotional state pre/during/post
• Result (pips, $, R)
• Followed plan? Y/N
• Lessons learned
• Execution rating (1-10)

Daily Tracking:

• Total trades
• Win rate
• Net P/L
• Followed plan %

Weekly Review:

• Aggregate statistics
• Best/worst trades
• Pattern recognition
• Next week goals

Monthly Review:

• Full performance metrics
• Strategy effectiveness
• Psychology assessment
• Plan adjustments if needed

SECTION 8: PSYCHOLOGY RULES

Pre-Trading Emotional Check: Rate 1-10 (must be 4-6 to trade): 1-3 = No trading (stressed/desperate) 7-9 = Trade normally 10 = Overconfident (be extra careful)

RED FLAG EMOTIONS (Stop if feeling):

• Desperate to make money back
• Angry at market
• Invincible
• Bored, need action
• Extremely fearful

Loss Protocol: 1 loss: Normal, continue 2 losses: 10-min break 3 losses: 30-min MANDATORY break Daily limit: DONE for day

Win Protocol: Big win: 15-min break, stay humble 5-win streak: Extra vigilant

Tilt Indicators (2+ = STOP):

• Trades outside setup
• Increased position size
• Moved stop wider
• 3 trades/day
• Revenge trading

Maximum Trades Per Day: 3

Daily Affirmations: “I follow my plan. One trade is meaningless. Process over outcome.”

SECTION 9: IMPROVEMENT PROCESS

Weekly Review (Saturday 9-10 AM):

1. Calculate statistics
2. Review execution
3. Identify patterns
4. Set weekly goal

Monthly Review (Last Sunday, 2 hours):

1. Full performance analysis
2. Strategy effectiveness check
3. Psychology assessment
4. Plan adjustments

Quarterly Deep Dive: Complete 100+ trade analysis Consider major adjustments

Testing New Ideas:

1. Backtest 100 setups
2. Demo 50 trades
3. Only then add to plan

No random changes mid-month

SECTION 10: CONTINGENCY PLANS

Drawdown Protocol: -5%: Review, identify issue, continue -10%: STOP live, demo 1 week -20%: STOP live, demo 1 month, strategy overhaul

Losing Streaks: 10 losses: Full review, reduce risk to 0.5%

Life Events: If stressed/sick/major event = STOP trading

Account Growth: Every +25%: Recalculate sizes, withdraw 50% profit

Strategy Failure: 3 losing months = Strategy broken, need new approach

Tech Backup: Backup broker funded, phone ready, mobile app installed

END OF TRADING PLAN Review Monthly Update As Needed

---

This is Ryan's actual plan—12 pages, specific, enforceable.

**After implementing this:** +14.7% in 60 days

**Before having this:** -34% over 18 months

**Same person. Same knowledge. Different approach.**

---

## **Part 4: Common Trading Plan Mistakes

### **Mistake #1: Too Vague**

**Wrong:**

“I’ll trade support and resistance” “I’ll use good risk management” “I’ll stop when I’m down too much”

**Right:**

“I’ll trade bullish pin bars at daily support levels that have been tested 2+ times” “I’ll risk exactly 1% per trade, calculated as (Account × 0.01) / (Stop pips × pip value)” “I’ll stop after losing 3% in one day, no exceptions”

**Specificity = Enforceability**

---

### **Mistake #2: Too Complicated**

**Wrong:**

“I trade 7 different setups across 4 timeframes on 6 pairs using 12 indicators with dynamic position sizing based on volatility and…”

**Right:**

“I trade ONE setup: Pin bars at support On ONE pair: EUR/USD During ONE session: 8-11 AM EST With FIXED risk: 1%”

**Simple = Executable**

---

### **Mistake #3: No Consequences**

**Wrong:**

“I should risk 1% per trade” “I should stop after losing 3%” “I should journal trades”

**Right:**

“I WILL risk 1% per trade. If I don’t, I start 30-day challenge over.” “I WILL stop after losing 3%. If I don’t, no trading for 1 week.” “I WILL journal every trade. If I don’t, that day doesn’t count toward profitability goals.”

---