One of the biggest lessons I have learned in trading is that having a plan is not enough. You need to follow it strictly.
Most losses don’t come from bad analysis, but from not respecting your own rules and trading emotionaly (overtrading, revenge trading).
When you start changing your entries, increasing risk, or forcing trades, that’s when things go wrong.
A trading plan only works if you actually follow it every time.
How to build your trading plan:
- Set your risk per trade and never change it. I set my risk based on setup type. For example, for A+ setups I use 0.5% risk. For A setups I use 0.25% risk.
- Set your daily/weekly loss limit
- Write your entry model clearly or necesary confluences to enter on a trade. For example: Liquidity sweep, CISD, FVG and SMT.
- Decide when NOT to trade (market conditions: high-impact news, bank holidays…)
- Keep it simple enough that you can follow it under pressure
- Plan what would you do after a win and after a loss
- Define how much trades you can take on 1 day. I personally take at the most 2 trades.
Its not easy to follow the trading plan, but if you follow it, you will save time and money.