Level 7 · Lesson 16 of 16 · 8 min read
How to Write a Forex Trading Plan (Worked Example)
Your business contract with yourself. Five sections that cover everything.
Researched and written by Laurent Why a Written Plan
Professional traders in banks, hedge funds, and prop firms all have documented trading plans. They don't trade from feeling. They trade from a system that's been tested, documented, and refined. Your plan is your business document: it defines what you do, how you do it, and what you don't do.
Section 1: Markets
- Pairs: Which pairs do you trade? (Pick 4-8, not 28)
- Timeframes: What chart timeframes do you analyze and trade from?
- Sessions: What hours are you actively trading? (London? New York overlap?)
Section 2: Strategy
- Trend identification: How do you determine the trend? (200 EMA, price structure, higher timeframe)
- Entry criteria: What specific conditions must be met? (Every condition must be objective and checklistable)
- Exit criteria: How do you exit? (TP method, trailing stop rules)
- Indicators used: Which ones and why? (Max 2-3)
Section 3: Risk Management
(Copy from your Lesson 7-15 template with your specific numbers)
Section 4: Routine
- Pre-market (30 min): Check economic calendar, mark key levels on charts, review watchlist pairs, check open positions.
- Active trading: Execute only trades that meet ALL criteria. Log every trade in journal immediately.
- Post-market (15 min): Review all trades taken, note emotional state, screenshot charts.
- Weekly review (1 hour): Calculate win rate, RR, expectancy. Identify recurring mistakes.
- Monthly review (2 hours): Deep strategy analysis. Should anything be adjusted?
Section 5: Psychology Rules
- After 2 consecutive losses: take a 1-hour break minimum.
- After hitting daily loss limit: stop for the day. No exceptions.
- After a large win: take the next trade at normal size. No "playing with house money."
- Before every trade, ask: "Am I trading based on my plan or based on emotion?"
Worked Example: Marcus' Intraday Plan (London Session)
Below is what a complete plan looks like once filled in. This is a hypothetical intraday trader who works the London session before his day job. Use it as a template, not a copy.
1. Markets
• Pairs: EUR/USD, GBP/USD, EUR/GBP (3 pairs total)
• Timeframes: H1 for bias, M15 for entries, M5 for execution only
• Sessions: London open (07:00 UTC) to first 2 hours of NY (15:30 UTC). Hard stop at 16:00 UTC.
2. Strategy: London-Open Breakout
• Trend filter: H1 200 EMA. Only longs above, only shorts below.
• Setup: Range identified between 05:00-07:00 UTC (Asia/Frankfurt overlap). Trade the first break-and-retest after 07:00.
• Entry: M15 close beyond the range edge + retest within 30 min + bullish/bearish pin bar or engulfing.
• Stop: 1.5 × M15 ATR(14) beyond the opposite range edge.
• Take-profit: TP1 at 1R (close half), trail rest with M15 21 EMA. No fixed TP2.
• Indicators: H1 200 EMA, M15 ATR(14), M15 21 EMA. Nothing else.
3. Risk Management
• Account: $8,000 (live)
• Risk per trade: 1% = $80
• Max daily loss: 3% = $240 (3 losing trades and platform closes)
• Max weekly loss: 5% = $400 (mandatory full week off if hit)
• Max concurrent positions: 2 (and never both on correlated pairs like EUR/USD + GBP/USD)
• Min RR: 1:1 to T1 only because the trail handles the rest
4. Routine
• 06:30 UTC: Check economic calendar, mark range high/low on all 3 charts, check overnight news
• 07:00 to 09:00 UTC: Active execution window. Only A-grade setups
• 09:00 to 11:00 UTC: Monitor open trades. No new entries unless news catalyst
• 11:00 UTC: Quick lunch break, log morning trades in journal
• 13:30 UTC: Re-check for any NY-session opportunity in trend direction only
• 16:00 UTC: Hard close. No exceptions. Trades not yet at TP are closed at market
• Friday after close: Weekly review (1 hour). Compute win rate, RR, expectancy. Compare to last 4 weeks
• First Saturday of month: Monthly review (2 hours). Check if any rule needs revision based on the data
5. Psychology Rules
• 2 losses in a row: 1-hour minimum break before next trade
• Daily loss limit hit: laptop closed, no more charts until tomorrow
• Big win (more than 2R): next trade at normal size, write a journal entry on why I want to size up so I notice the impulse
• If I touch a trade after entry to "tweak" SL or TP: that trade gets logged as a discipline violation in the journal even if it wins
• Pairs: EUR/USD, GBP/USD, EUR/GBP (3 pairs total)
• Timeframes: H1 for bias, M15 for entries, M5 for execution only
• Sessions: London open (07:00 UTC) to first 2 hours of NY (15:30 UTC). Hard stop at 16:00 UTC.
2. Strategy: London-Open Breakout
• Trend filter: H1 200 EMA. Only longs above, only shorts below.
• Setup: Range identified between 05:00-07:00 UTC (Asia/Frankfurt overlap). Trade the first break-and-retest after 07:00.
• Entry: M15 close beyond the range edge + retest within 30 min + bullish/bearish pin bar or engulfing.
• Stop: 1.5 × M15 ATR(14) beyond the opposite range edge.
• Take-profit: TP1 at 1R (close half), trail rest with M15 21 EMA. No fixed TP2.
• Indicators: H1 200 EMA, M15 ATR(14), M15 21 EMA. Nothing else.
3. Risk Management
• Account: $8,000 (live)
• Risk per trade: 1% = $80
• Max daily loss: 3% = $240 (3 losing trades and platform closes)
• Max weekly loss: 5% = $400 (mandatory full week off if hit)
• Max concurrent positions: 2 (and never both on correlated pairs like EUR/USD + GBP/USD)
• Min RR: 1:1 to T1 only because the trail handles the rest
4. Routine
• 06:30 UTC: Check economic calendar, mark range high/low on all 3 charts, check overnight news
• 07:00 to 09:00 UTC: Active execution window. Only A-grade setups
• 09:00 to 11:00 UTC: Monitor open trades. No new entries unless news catalyst
• 11:00 UTC: Quick lunch break, log morning trades in journal
• 13:30 UTC: Re-check for any NY-session opportunity in trend direction only
• 16:00 UTC: Hard close. No exceptions. Trades not yet at TP are closed at market
• Friday after close: Weekly review (1 hour). Compute win rate, RR, expectancy. Compare to last 4 weeks
• First Saturday of month: Monthly review (2 hours). Check if any rule needs revision based on the data
5. Psychology Rules
• 2 losses in a row: 1-hour minimum break before next trade
• Daily loss limit hit: laptop closed, no more charts until tomorrow
• Big win (more than 2R): next trade at normal size, write a journal entry on why I want to size up so I notice the impulse
• If I touch a trade after entry to "tweak" SL or TP: that trade gets logged as a discipline violation in the journal even if it wins
Notice what is NOT in this plan: no profit targets ("I want to make $X per month"), no win-rate goals ("I want to win 70%"), no comparisons to other traders. The plan describes process. The market decides the outcome. Plans that promise outcomes don't survive contact with losing streaks.
Your plan is alive: It's not a one-time document. Review it monthly. As your skills improve and market conditions change, update it. But never change it in the middle of a losing streak. Make changes when you're calm, based on journal data, not when you're emotional, based on recent results.
Level 7 complete: You now have a skill that most retail traders never develop: a systematic approach to risk. You can size positions, set stops, enforce limits, and build a complete plan. This is what prop firms test for. This is what separates the minority who stay profitable from the majority who don't.
Key Takeaways
- • Section 1: Market (what pairs, what timeframes, what sessions).
- • Section 2: Strategy (entry rules, exit rules, indicator framework).
- • Section 3: Risk management (position sizing, limits, correlation).
- • Section 4: Routine (pre-market, during trading, post-market, weekly/monthly review).