The Trading Plan — Written Before the Money Moves

The seven sections

A complete plan states: (1) MARKETS — what you trade and why; (2) SETUP — the exact conditions that qualify a trade (pattern + location + confluence score, day 28); (3) ENTRY TRIGGER — the specific event that executes it; (4) INITIAL STOP — the structural invalidation and the % risk; (5) EXIT PLAN — target and/or trailing rules; (6) SIZE — the formula (day 29) and caps (day 46); (7) REVIEW — when and how you evaluate. If any section is missing, the plan is a preference, not a process.

Why writing works

The plan is a pre-commitment device (day 30's stop rule, scaled up): it transfers decisions from your in-trade self (emotional, loss-averse, anchored) to your pre-trade self (calm, analytical). Douglas's framing: the market offers unlimited opportunities, which means the only scarce resource is DISCIPLINE — the plan is where discipline is manufactured, because "followed plan Y/N" becomes checkable.

The one-page test

A plan you cannot fit on one page is a plan you will not follow. Every professional variation (Tharp's objectives-first, Elder's triple-screen checklist, BNF-style simplicity) converges on the same shape: few rules, written down, followed mechanically, revised only OFF-cycle (never mid-trade, never after a single loss).

Sources

• Trade Your Way to Financial FreedomVan K. Tharp
• Trading in the ZoneMark Douglas