What is Trading Plan?
A trading plan is a written contract with yourself: what you trade, when you trade, how much you risk, and how you review. It turns discretion into measurable rules.
Formula
Trading Plan Framework: 1. Trading Philosophy & Goals 2. Markets & Instruments 3. Entry Rules (specific conditions) 4. Exit Rules (stops, targets, time) 5. Position Sizing 6. Risk Management Rules 7. Daily Routine 8. Psychology Guidelines 9. Review & Improvement Process
Indian market context (NSE)
Reference levels: Nifty 50 at 24,300, Reliance Industries at ₹1,300, Bank Nifty futures at 55,000 (lot size 30). Examples below show how Trading Plan shows up on Indian index, equity, and futures books — update to live quotes in your journal.
Nifty 50 perspective
Trading Plan on Nifty (24,300): backtest includes 9:15 liquidity and expiry-day behaviour; edge on index may vanish outside 10:00–14:30 window.
Reliance Industries perspective
Trading Plan on Reliance (₹1,300): liquidity is deep but event gaps dominate — strategy rules need explicit earnings blackout weeks.
Bank Nifty futures perspective
Trading Plan on Bank Nifty futures (55,000): high beta suits shorter holds; overnight trading plan must state NRML risk and gap plan in writing.
Minimum plan sections
- Markets & instruments (Nifty, Bank Nifty, stocks, options)
- Approved setups with entry/exit/skip criteria
- Risk per trade and max drawdown pause rule
- Session times and no-trade windows (expiry, news)
- Weekly and monthly review checklist
How to validate
- Validate Trading Plan with a written rule and at least 20 tagged examples.
- Ask whether the reading changed because of process or one outlier trade.
- Compare two independent time windows before adjusting position size.
- Document validation date in weekly review notes.
How to track in TradeLyser
- Mention Trading Plan in trade comments when it influenced the decision.
- Mirror the term in weekly review questions for consistency.
- Filter trades mentioning the concept during monthly analytics.
- Cross-link to related glossary terms in mentor notes.
Best practices
- Teach Trading Plan the same way to mentors and peers — shared vocabulary.
- Re-read this page after major rule changes to Trading Plan usage.
- Prefer one improvement per month over ten simultaneous tweaks.
- Link learn articles when Trading Plan needs deeper study.
Common pitfalls
- Using Trading Plan buzzwords without measurable journal tags.
- Copying another trader’s Trading Plan rule without sample size context.
- Skipping weekly review because the term feels “basic”.
- Letting social media redefine Trading Plan mid-quarter.
How to use this in TradeLyser
Mirror each approved setup as a strategy tag in Strategy Board. Link the plan PDF or doc in mentor mode so reviews use the same vocabulary.
Related terms
Expectancy answers whether your edge pays each time you repeat the setup. Positive expectancy means the system earns over many trades; negative expectancy means it bleeds even with a high win rate.
A journal template defines the standard fields captured for each trade and session — instrument, setup tag, entry/exit, stop, size, P&L, emotion grade, rule compliance, and notes. Templates enforce consistency so analytics remain comparable over months.
Maximum drawdown records the worst fall from a prior equity high to the subsequent low. It describes pain and capital required to stay in the game — not just the final P&L.
A pre-trade checklist is a fixed list of conditions that must be true before order placement — covering setup validity, risk size, stop location, daily loss headroom, and emotional readiness. It converts discretionary impulses into pass/fail decisions.
Risk per trade is the planned loss at your stop — not the notional value of the position. A ₹10 lakh notional trade might risk only ₹3,000.
Discipline is repeatable adherence to entries, exits, size, and pause rules — especially after wins and losses.
By trader level
Start here — essential concepts
New to trading or journaling? These are the core terms you need to understand before anything else.
FAQ
What belongs in a trading plan?
Setups, risk, size, session rules, and review cadence — one page is enough.
Update plan after every loss?
Review weekly or monthly, not emotionally after one trade.
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