Building your trading plan

It is 10:40 ET (22:40 ICT in winter). You are down 1.5R after two stops, and NQ is pressing into a level you did not map this morning. Something that looks like a setup is half-formed. Do you take it, at what size, and when do you stop for the day? Every routine in M7.01–M7.03 refers to “the plan”. This lesson builds it, so that each of those questions was answered at 08:30 ET, when you were calm, and not now.

Key term

Trading plan (kế hoạch giao dịch): your written, dated rules for what you trade, when, at what size, and when you stop Definition.

If-then rule (quy tắc nếu–thì; psychologists call it an implementation intention, ý định thực thi): a rule that names a situation and your response in advance: “If X happens, then I do Y” Definition. A plan is a set of these, one per decision you would otherwise make under pressure.

How it works

Eight lines, each one a rule

A plan written as a description (“I trade breakouts and sometimes fades”) leaves every decision to the moment. A plan written as rules makes the decision once, in advance. Here are the eight lines, first as most traders write them, then as rules House rule:

Every rule has three parts: a trigger you can check afterwards from your log, the action, and the exit (where the trade or the session is over). The test is simple: could a stranger reading your journal tell whether you followed the line? “When it looks right” fails. “On a 5-minute close back inside the level” passes.

Line 2 also carries an exclusion: everything not named is a no-trade. Add setups one at a time, starting with those you have the most journaled examples of, not those that felt best last week.

Why write it as if-then

The researchers’ explanation is that naming the situation in advance turns it into a cue: when the cue appears, the response is already chosen, so it takes less deliberation in the moment. In trading terms, the decision you would have made at 10:40 ET with a red P&L was made at 08:30 ET with a flat one. The pre-trade checklist from M0.06 becomes a lookup, not an invention, which is what lets the in-session routine (M7.02) run without debate.

House rules are not market claims

Most numbers on a plan are house rules: 1% risk, −2R and +3R limits, one re-entry after 15 minutes, review on Sunday House rule. Nobody measured that these numbers are optimal. They are policies you choose, and the right way to set the loss limits is from your own drawdown distribution (M7.08). Write them as policy, not as truths about the market.

The setups on line 2 are different again. Eleven of the twelve M5 setups carry a Lore badge on their header; the one Plausible result (the sweep in M5.05) is smaller than the cost of a round trip. Putting a setup on your plan does not give it an edge. It makes it scorable: same trigger, same exit, logged every time, so your own journal can start to answer the question.

What the data says

Read the three numbers as a range, not a choice. The 2006 estimate of 0.65 was inflated by studies that went unpublished when they found nothing; after correction the effect is somewhere between small and modest MeasuredOther market. For a trader, the honest summary is: writing rules as if-then is a cheap habit that probably helps you do what you decided PlausibleOther market. Whether it makes a trader more money has not been tested, and it cannot turn a setup without an edge into one.

Worked example: building the plan, line by line

A synthetic trader with a $5,000 sim account who trades MNQ ($2 a point, 0.25-point ticks; NQ is $20 a point). This is an illustration of the process, not a plan to copy.

1. Markets and session. Start with what you know: MNQ only, 09:30–11:30 ET (21:30–23:30 ICT in winter). Two hours, because that is what the trader can watch fully awake.
2. Setups. Two, not five: failed breakout at a mapped level (M5.01) and breakout–retest continuation (M5.07), the two with the most journaled sim examples. Both carry Lore badges; the plan says so.
3. Entries. Failed breakouts get the rejection entry (M6.04); breakout–retests get the retest entry (M6.03). One entry family per setup.
4. Risk and size. 1% of $5,000 = $50. With a 10-point stop: 10 × $2 = $20, plus $1.50 round-turn costs = $21.50 a contract, so $50 ÷ $21.50 = 2.3, rounded down to 2 MNQ. With a 30-point stop: $61.50 a contract, over budget, so no trade. The formula is owned by M6.09.
5. Daily limits. −2R stop, +3R cap on new trades. House rules, to be checked against the trader’s own drawdowns once the journal holds enough trades (M7.08).
6. Re-entry. At most one per setup, after 15 minutes, same size.
7. Routine. One line each from M7.01–M7.03: sheet done by 09:15 ET, each trade logged within 5 minutes of the exit, review at 12:00 ET.
8. Review. Sundays, 30 minutes. The only day a line may change.

Now the read-aloud test: if you cannot read the eight lines in about 60 seconds, the plan is too long to use mid-session. M7.09 shows how to compress it to one page and how to use it at the screen.

Version it. Date every revision and write one sentence on why. Keep old versions: they stop you re-adding a setup you already cut for a reason. A line edited mid-session is not a plan change; it is a rationalisation with a time stamp.

When the plan fails

It fails without being broken. A line like “if NQ shows strength, look for longs” is never technically violated, because “strength” can be read into any chart. The trader follows the plan and still improvises every trade. The fix is the stranger test above: rewrite the line until the log alone shows whether you kept it.

It fails while being followed. A trader keeps every line for 60 trades, 100% adherence, and the setup’s expectancy after costs is negative. The plan did its job: it produced clean, comparable data. The weekly review (M7.11) is where that data changes line 2. Discipline makes a result readable; it does not make it positive.

Prop-firm note. If you trade an evaluation or funded account, the firm’s daily loss limit and position limits are hard ceilings; your house limits on lines 4 and 5 sit inside them, never above. The Prop Firm course covers each firm’s rules; check your firm’s help center before you trade.

Common mistake: Writing the plan as a description of what you do (“I trade breakouts and sometimes fades”) instead of rules about what you will and will not do. A plan that excludes nothing decides nothing.

Common mistake: Treating the if-then research as proof that a written plan makes money. It is measured for following through on goals in other domains, with a small corrected effect; its effect on trading returns is not yet measured. Adherence is the target, not P&L.

Common mistake: Editing a line during the session because “today is different”. Write the idea in the journal as a candidate change and decide on Sunday. A mid-session edit is made by exactly the mood the plan was written to overrule.

Drill: rewrite your plan as eight if-then lines

1. Write your current plan, or the way you trade now, in eight lines, one per component above.
2. Rewrite each line as “If [trigger], then [action]; [exit]”. Use numbers, times in ET and lesson references where they apply.
3. For each line, write the journal field that would show whether you kept it (time stamp, contracts, closed P&L, setup tag).
4. Mark each number as a house rule or as a claim about the market, and give every setup its badge from M5.

What we don’t know yet

• Whether if-then plans raise plan adherence among futures day traders: not yet measured; the support is from other domains.
• Whether higher adherence improves trading results net of costs: not yet measured, and it depends on whether the setups on the plan have an edge.
• Our lab has no adherence study of its own (search date 2026-11-09); the journal fields in the drill are the data such a study would need.

Recap

• A trading plan is eight lines (markets and session, setups, entries, risk and size, daily limits, re-entry, routine, review), each written as an if-then rule with a checkable trigger, an action and an exit.
• If-then plans have a measured but small effect on following through in other domains; for trading the effect is plausible and untested, and no study links them to returns.
• Risk %, loss limits, cooldowns and review day are house rules; setups on the plan are hypotheses you are scoring, not edges.
• Change the plan only on review days, dated, with the reason; keep old versions.

Quiz

Further reading

• Gollwitzer, P. M. & Sheeran, P. (2006). Implementation intentions and goal achievement: a meta-analysis of effects and processes. Advances in Experimental Social Psychology 38: the 94-test meta-analysis behind the evidence box.
• Summary of the 2024 bias-corrected update (Sheeran, Listrom & Gollwitzer): why the corrected effect is smaller.
• Our lab: in our review of pre-market process evidence (November 2026), if-then plans grade Measured for behaviour in other domains and untested for trading returns; the daily pre-market plan uses the same if-then format.

Prerequisites: M5.13 Telling setups apart, M6.08 Stops & targets, M7.01 Pre-session routine. Next: M7.05 Cognitive biases, the errors these rules are written to cage.

Educational content only, not financial advice. Futures trading involves substantial risk of loss. Synthetic examples are illustrations, not trade calls.