What is a trade plan?
In one line: A trade plan is the written setup for one trade, decided before you enter: why, where you get in, where you're wrong, where you take profit, and how big.
A filled-in example
Account: $5,000. Risk rule: 1%, so $50.
| Item | Plan |
|---|---|
| Market | EUR/USD, 1-hour chart |
| Why | Daily uptrend; price pulled back and a 1-hour body closed back above 1.0850 |
| Entry | 1.0855 |
| Stop loss | 1.0830, past the last place price turned up (25 pips) |
| Take profit | 1.0905 (50 pips, 2 times the risk) |
| Size | $50 ÷ 25 pips = $2 a pip, 0.2 lot |
| News check | No big release in the next 4 hours |
If the stop is hit, about −$50. If the target is hit, about +$100. A math example, not a promise.
The position size calculator gives you the size line.
Trade plan vs trading plan
A trading plan is your overall rulebook: markets, hours, risk rules, daily limits, review routine. See how to write a trading plan.
A trade plan is one trade, filled in from that rulebook. One sentence often covers the "why": "Uptrend, pullback held the level, body closed back above."
Why it matters
Decisions made before a trade are calmer than decisions made during one. Once money is moving, it's hard to think clearly about where you're wrong.
A written plan also feeds your journal. After the trade you can check: did I follow it? That's the review loop that improves your process.
Turn the plan into orders right away. A Bracket order places the entry, stop and target together, so the plan runs even if you step away.
A common mistake
Planning the entry but not the exit. Most beginners know where they want in. Fewer write where they're wrong or where they'll take profit. Then every tick becomes a new decision.
The other trap: changing the plan mid-trade. Moving the stop further away "just this once" turns a 1% loss into 2% or 3%.
Use the pre-trade checklist before entry, and log the plan in your trading journal.
Questions
What should a trade plan include?
The market, the reason, the entry, the stop, the target, the size, and a news check. All decided before you enter.
Can I change my trade plan during the trade?
Only in ways your rules already allow, like moving a stop closer to lock in part of a move. Never further away.
How long should a trade plan be?
Short. A few lines or a small table is enough. If you can't explain the reason in one sentence, it's often not a clear setup.
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