Building a Trade Plan
Trading Mastery
10 min read
Assemble everything into a professional-grade trade plan suitable for a prop firm submission or your own systematic process.
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10 min read
Assemble everything into a professional-grade trade plan suitable for a prop firm submission or your own systematic process.
A trade plan is a written document that specifies markets, edge, entry rules, exit rules, position sizing, and review cadence — the artifact a prop firm or your future self can audit your trades against. If you can’t write it down, you don’t have a system.
A professional trade plan is your playbook—your business model for trading.
Whether you’re applying to a prop firm, journaling seriously, or preparing for funding, this post shows you how to build a clear, structured, and complete trade plan.
Each section below maps to a prior lesson: entry/exit logic → Algorithmic Thinking; size-up rules → Scaling Strategies; blackout windows → Trading Around News Events; entry triggers → Understanding Order Flow and DOM. The plan is where those pieces stop being separate ideas.
It’s not just a strategy description.
Memory is unreliable: hindsight bias rewrites yesterday’s loss as “I knew it,” recency bias inflates the last three trades. A written plan is the only artifact you can audit against — without it, every review is fiction.
A professional plan includes:
It keeps you accountable It makes your edge transferable It forces clarity
What setup(s) are you trading?
| Item | Description |
|---|---|
| Strategy Name | e.g. MSS Liquidity Sweep + BOS |
| Market Type | BTC/USDT, ETH, Nasdaq, FX pairs |
| Bias Filter | HTF trend, market profile context |
| Trigger | Structure break, reclaim, order flow shift |
| Timeframe | 5m/15m execution with 1H structure |
IF price sweeps a 1H swing low
AND price reclaims the level with a bullish engulfing
AND delta turns positive with volume spike
THEN I enter long with stop below MSS low
What conditions invalidate your setup?
Examples:
Knowing when not to trade is critical for consistency.
| Parameter | Rule |
|---|---|
| Max Risk per Trade | 1% of capital |
| Max Trades per Day | 3 |
| Max Daily Loss | 3R |
| Max Drawdown | 10% — pause + review |
| Risk/Reward Target | Min 2:1, partial at 1R |
| Position Size Method | Fixed % risk + volatility-based sizing |
Add rules for news events, scaling, weekend holds, etc.
Even a 60% WR strategy will produce 7 or more consecutive losers about 5% of the time over 100 trades. With 1% risk per trade and a 5% prop-firm daily loss limit, a 5-loss streak in one session ends the account. Size assuming losing streaks are inevitable, not exceptional.
You need to include or be ready to present:
Pick one direction — don’t list contradictory numbers as a single target. With 45% WR and 2:1 partials, expectancy lands near 0.4–0.6R per trade (realistic). 1.2R+ expectancy is rare and should be flagged as aspirational, not baseline.
| Metric | Target / Current |
|---|---|
| Win Rate | 40–55% |
| Profit Factor | > 1.5 |
| Expectancy / Trade | 0.4–0.6R (realistic baseline) |
| Expected Value | Positive over 100 trades |
| Max Drawdown | < 15% |
Use screenshots or trading journal data (Edgewonk, TradeZella, etc.)
Include 2–3 example trades:
This shows your thinking, discipline, and awareness.
Prop firms care about how you handle loss, pressure, and variance.
Outline:
This section separates pros from hopefuls.
Show how you improve. Make the cadence explicit and tickable, not a vague intention:
Example trigger: “If Profit Factor drops below 1.3 for 50 trades, I pause and review trade quality.”
Industry estimates. Assume you will fail your first attempt and budget the evaluation fee accordingly.
Most evaluations fail. The plan is not optional — it is the only thing standing between you and the daily-loss breach that ends the account on day 4.
If submitting to a firm like FTMO, Topstep, The5ers, or FundedNext (avoid operators with unresolved regulatory action — verify status before applying):
| Firm | Profit target | Max daily loss | Max overall DD | DD type | Min trading days |
|---|---|---|---|---|---|
| FTMO 100k Challenge | 10% / 5% | 5% | 10% | Static | 4 |
| Topstep $50k Combine | $3k profit | varies | $2k–$2.5k | Trailing intraday | 0 (post-2023) |
| The5ers Hyper Growth | 8% | 4% | 4–10% | Mixed | 6 |
| FundedNext Stellar 1-Step | 10% | 5% | 10% | Static | 5 |
Verify rule numbers against each firm’s current rulebook before submitting (FTMO “Trading Objectives”, Topstep “Maximum Loss Limit”, The5ers “Program Rules”) — terms change.
Your plan is your shield.
When emotions spike, when volatility hits, when doubt creeps in—you lean on your plan, not your feelings.
Write it. Refine it. Trade it. Review it. That’s how pros operate.
Eight sections: strategy overview, entry criteria, invalidation criteria, risk parameters, edge and performance stats, sample trades, psychological plan, and review/optimization process. Together they cover edge, execution rules, risk, psychology, and the data to prove it works.
Conditions that prove your thesis wrong before the stop is hit: a break of structure that fails and closes back, lack of volume on the reclaim, or order flow contradicting the bias (for example, stacked sell imbalances at a long entry). Knowing when not to trade is as important as knowing when to enter.
You have the tools — order flow, automation, news, scaling, planning. The plan is the artifact that ties them together. The next 100 trades will tell you whether the artifact survives contact with the market.