Trading plan: free template and a worked example

What a trading plan is

A trading plan is a written set of rules that says what you trade, when, why you enter, how much you risk and when you stop. Every one of those decisions gets made in advance, on a quiet evening with the charts closed, so that when a position is moving against you there is nothing left to decide.

That is the whole point. Under pressure, most traders do not lack knowledge; they lack a pre-commitment. The stop gets moved "just this once", the size gets doubled to win back a loss, a fourth trade goes on because the first three were boring. A plan does not make you disciplined, but it turns discipline into a checklist you can fail visibly, and anything you can see failing you can fix.

Every institutional desk runs on a version of this. Traders work to a mandate: which markets, how large, and a loss limit that ends the day when it is hit. A retail trading plan is the same mandate, written by you, for you, with you also playing the risk manager.

The plan sits inside a loop. The plan says what you will do, the trading journal records what you actually did, and the weekly review compares the two and changes one thing.

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Free trading plan template (Word + PDF)

The template has nine sections, each with a line of guidance and a short example in grey, and blank tables to fill in. The Word version is editable, so you can type straight into it and save a new version each time the plan changes. The PDF is for printing and keeping next to the screen. No signup for either.

Fill it in section by section using the worked example below as a reference. Then do the part most people skip: sign it, date it, and put a version number on it. When you change a rule at a weekly review, save it as version 2, not over the top of version 1. Six months later, the version history tells you more about your trading than any single month of results.

Goals, markets and setups

The worked example throughout this guide is a realistic part-time trader in Sydney: an A$10,000 account at an ASIC-regulated broker, trading EUR/USD, AUD/USD and gold (XAU/USD) on the 4-hour chart, about six hours a week, risking 1% per trade.

1. Goals

Write goals you control. "Make 5% a month" is an outcome, and the market decides outcomes. "Follow every rule on at least 95% of trades this quarter" is a process goal, and it is the one that eventually produces the outcome.

The example trader writes: follow the plan on 95% of trades, log every trade the same night, and complete 12 weekly reviews in the quarter. They also write down the one number that forces a rethink: if the account falls 10% from its high (A$9,000 from A$10,000), trading stops until the plan has been rebuilt.

2. Markets and sessions (Sydney time)

Two to four markets is plenty. Each one should have a reason, and each should be traded in the session where it actually moves. Times below are Sydney winter time (AEST); from October, as Sydney moves to daylight saving and London and New York move off it, the same sessions land up to two hours later on a Sydney clock.

"News I avoid" means no new entries in the 30 minutes before, and a decision in advance about whether open trades are held through. The example trader closes or halves anything within 1R of the stop before a tier-one release.

3. Strategy and setup rules

A setup rule has to be specific enough that another trader could look at the chart and agree whether it is present. "Buy strength" fails that test. This passes it:

• Trend filter: on the daily chart, price is above the 50 EMA for longs (below it for shorts).
• Location: on the 4-hour chart, price has pulled back to a prior support or resistance level.
• Trigger: a 4-hour candle closes back in the trend direction from that level.
• Invalidation: the setup is wrong if price closes beyond the swing point that formed the level.

The example plan has exactly one setup. Most beginners would do better with one setup traded 50 times than five setups traded ten times each, because only the first gives you enough trades to know whether it works. The forex trading strategies guide covers the main families if you are still choosing. Write down the setups you will not trade too; for most people that list includes news spikes and counter-trend "it has gone too far" entries.

The pre-trade checklist

The checklist is where the plan meets the order ticket. Every question is yes or no, and one "no" means no trade. It takes about a minute, which is roughly the amount of time an impulse needs to fade.

The template's version has ten items, adding the higher-timeframe trend, a news check, open-position count and currency overlap, the two-consecutive-losses rule, and my favourite question: would I still take this trade if my last three trades had lost? If the honest answer is no, the trade is about your P&L, not the chart.

Risk, stops and trade management

4. Risk per trade and position sizing

The example trader risks 1% per trade, which is A$100 on A$10,000, with a maximum of three open positions and never more than two sharing a currency (EUR/USD and AUD/USD are both short US dollars when both are long). Position size is worked backwards from the stop, never forwards from a lot size that feels right:

Three trades from the example plan, at an AUD/USD rate around 0.70, where one pip on a standard lot of a USD-quoted pair is worth about A$14.20:

• EUR/USD, 25-pip stop: 100 / (25 x 14.22) = 0.28 lots.
• AUD/USD, 30-pip stop: 100 / (30 x 14.22) = 0.23 lots.
• XAU/USD, US$20 stop (200 pips at US$0.10 a pip, so about A$14.22 per pip per 100 oz lot): 100 / (200 x 14.22) = 0.035 lots, rounded down to 0.03, which risks about A$85.

Always round down. The position size calculator does this for any pair, and there is a free spreadsheet version on that page if you would rather plan trades offline. The same sizes stay well inside ASIC's retail leverage caps of 30:1 on major FX and 20:1 on gold, so leverage is never what limits this plan; the 1% rule is.

5. Stop and target rules

The stop goes where the setup is proven wrong: beyond the swing low (or high) that formed the level, plus the spread. It does not go at a round number of pips chosen to make the size bigger. If the correct stop makes the position too small to bother with, the answer is to skip the trade. The stop loss guide covers placement methods in more detail.

The first target is at least 2R, meaning twice the distance to the stop. If the next obvious resistance is closer than 2R, the trade fails the checklist. At 1:2, a 40% win rate is still profitable before costs, which is why the risk-reward ratio belongs in the plan rather than in your head.

6. Trade management

Management rules stop you fiddling. The example plan:

• At +1R, move the stop to break-even.
• At 2R, close half and trail the rest behind each new 4-hour swing.
• Time stop: if the trade has not reached +1R within ten 4-hour candles (about two trading days), close it.
• Never widen a stop. Tightening is allowed only under the rules above.

Daily and weekly loss limits

Loss limits are circuit breakers. They exist because your decision-making after a string of losses is not the same as your decision-making after a good night's sleep, and the plan should assume that rather than hope otherwise.

The numbers fit together on purpose. Three open positions at 1% each is 3% of open risk, which equals the daily limit: if every open trade stops out, the day is over automatically and there is no temptation to "make it back". Two consecutive losses (2%) ends the session even before the daily limit is reached, because two quick stop-outs in a row usually mean either the market has changed character or you have.

The weekly limit of 6% means the worst possible week costs A$600. The account can absorb that several times while you work out what went wrong, which is the entire job of risk limits: keeping you in the game long enough for the review process to work. Trading psychology covers why tilt after losses is so predictable, and the drawdown recovery calculator shows why a 10% hole is easy to climb out of and a 40% one is not.

Routine and review

7. Routine

A routine removes the decisions about how to start and end a session. The example trader's weeknight:

• 4:30pm, pre-market (15 minutes): check the economic calendar for anything tier-one before 2am, mark the 4-hour levels on the three charts, write a one-line bias for each.
• 5pm to 11pm, session: trade only checklist setups, set alerts rather than staring at candles, and step away between 4-hour closes.
• After the session (10 minutes): log every trade in the journal with a screenshot, note any rule broken, close the platform.

8. Review cadence

Weekly, on Sunday before the market opens on Monday morning Sydney time: read the week's journal against the plan, count the rule breaks, and pick one change. One. Change three things and you will never know which one worked.

Monthly: judge the strategy itself, but only on a sample of at least 20 trades measured in R. Fewer trades than that tells you almost nothing about whether an edge exists; a coin can land heads five times in a row.

The example plan on one page

Here is the whole example condensed to the lines that matter. If your own plan cannot be summarised this tightly, some of its rules are probably opinions.

Why most trading plans get ignored

Most traders who write a plan stop following it within a few weeks. The reasons are predictable:

• Rules that are not rules. "Be patient" and "only take good setups" cannot be failed, so they cannot be followed either. Every line should be a number or a yes-or-no test.
• No consequence for breaking it. Log every rule break in the journal as a separate column. A number that goes up is harder to ignore than a vague feeling of guilt.
• Editing it mid-session. The plan changes at the weekly review and nowhere else.
• Too long. If it does not fit on three pages, you will not reread it. The template is deliberately three pages.
• Written for someone else's life. A plan built around the London open is useless if you have kids to put to bed at 7pm. Pick sessions you can actually sit.

A plan will not give you an edge you do not have, and most retail CFD and forex accounts lose money regardless of paperwork. What it does is make your results measurable, so that you find out whether your edge is real before the account runs out. For the full step-by-step path from opening an account to placing a first trade, see how to trade forex in Australia.

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