How do you create a trading plan?

To create a trading plan, define the markets you will trade, your entry and exit rules, position sizing, risk per trade, stop-loss rules, profit targets, and daily loss limits. The goal is to decide how you will trade before you put money at risk.

A trading plan should also describe the setups you are willing to trade. For example, you might trade breakouts or support and resistance setups on specific BTC or ETH timeframes. You can define which indicators or price conditions must be present before entering a position.

It is also useful to write down when you will stay out of the market. Major economic announcements, low liquidity, poor market conditions, or setups that do not meet your rules can all be reasons to skip a trade.

Your trading journal can then show how closely you followed the plan. This makes it easier to separate problems with the strategy from problems caused by poor execution or discipline.