Trading Plan Generator
A comprehensive skill for creating disciplined, rule-based trading plans that help you manage risk, control emotions, and trade consistently.
What This Skill Does
Helps you create professional trading plans for:
Day Trading - Intraday positions, quick scalps Swing Trading - Multi-day to multi-week positions Position Trading - Long-term trend following Options Trading - Directional and income strategies Investing - Long-term portfolio management Why You Need a Trading Plan
Without a plan:
Emotional, impulsive decisions Inconsistent position sizing No clear entry/exit rules Revenge trading after losses Account blowup risk Can't identify what works
With a plan:
Disciplined, rule-based trading Consistent risk management Clear decision framework Emotional control Long-term profitability Measurable improvement
The Stats:
90% of traders fail (most have no plan) Professional traders ALL have written plans Plan + discipline = edge Core Components of a Trading Plan 1. Trading Goals & Mindset Financial goals (realistic) Time commitment Risk tolerance Trading philosophy Success definition 2. Risk Management (MOST IMPORTANT) Maximum risk per trade (1-2% recommended) Maximum daily loss limit Maximum drawdown tolerance Position sizing rules Stop-loss requirements Risk/reward minimums 3. Market Selection What markets you trade (stocks, forex, crypto, options) Liquidity requirements Price range preferences Sector focus (if any) What you DON'T trade 4. Trading Setup Criteria Entry signals (technical/fundamental) Confirmation requirements Timeframes used Pattern recognition Market condition filters 5. Entry Rules Exact entry triggers Order types (market, limit, stop) Position sizing calculation Scaling in (if allowed) Time-of-day restrictions 6. Exit Rules Stop-loss placement (hard rules) Take-profit targets Trailing stop strategies Time-based exits Scaling out rules Break-even stops 7. Trade Management When to adjust stops When to add to position When to reduce size When to exit early Never scenarios (what you never do) 8. Psychology & Discipline Pre-market routine Emotional state check Tilt recognition Break requirements End-of-day review Accountability measures 9. Performance Tracking Trade journal requirements Metrics to track Review frequency Improvement process Strategy adjustment criteria Risk Management Frameworks The 1% Rule (Recommended for Most Traders)
Never risk more than 1% of account on single trade
Example:
Account size: $50,000 Maximum risk per trade: $500 (1%) Stock entry: $100 Stop-loss: $98 Risk per share: $2 Position size: $500 / $2 = 250 shares Total position: $25,000 (50% of account) Actual risk: $500 (1% of account)
Benefits:
Can survive 20+ consecutive losses Removes emotion from sizing Consistent risk across trades Protects capital The 2R Minimum Rule
Only take trades with 2:1 reward-to-risk or better
Example:
Entry: $100 Stop: $98 (risk = $2) Target: $104 (reward = $4) R:R = 2:1 ✅
Why it matters:
Can be profitable with 40% win rate Forces selective trading Improves overall edge Maximum Drawdown Limit
Hard stop trading if down X% from peak
Recommendations:
Conservative: 10% drawdown → stop trading Moderate: 15% drawdown → stop trading Aggressive: 20% drawdown → stop trading
When hit:
Stop trading immediately Review all trades Identify mistakes Paper trade until recovered mentally Resume with reduced size Trading Styles Day Trading
Definition: Open and close all positions same day
Characteristics:
Multiple trades per day No overnight risk Pattern Day Trader rules ($25K minimum) High screen time requirement Quick decisions
Best for:
Full-time traders High risk tolerance Quick decision makers Pattern recognition skills
Key rules:
Never hold overnight Reduce size near close Stop trading after daily loss limit First 30 min often volatile Swing Trading
Definition: Hold positions 2-10 days
Characteristics:
2-5 trades per week Overnight risk acceptable Part-time friendly Technical + fundamental mix
Best for:
Part-time traders Day job professionals Trend followers Patient traders
Key rules:
Always use stop-losses Check positions before/after market Respect earnings dates Weekend gap risk consideration Position Trading
Definition: Hold positions weeks to months
Characteristics:
Long-term trend following Fundamental focus Low trade frequency Larger position sizes
Best for:
Investors with edge Low time availability Fundamental analysts Macro trend followers
Key rules:
Wide stops (volatility-based) Focus on major trends Ignore daily noise Strong thesis required Entry Strategies Technical Entry Methods
- Breakout Entry
Price breaks above resistance Increased volume confirmation Wait for pullback or buy breakout Stop below breakout level
- Pullback Entry
Wait for trend pullback Enter at support/moving average Continuation confirmation Stop below support
- Reversal Entry
Identify overextended move Look for reversal signals Multiple confirmations required Wider stops needed
- Pattern Completion
Specific pattern (flag, triangle, etc.) Pattern completion signal Volume confirmation Target based on pattern Fundamental Entry Triggers
For Stocks:
Earnings surprise Guidance raise Product launch Sector rotation Insider buying Short squeeze setup
For Macro:
Fed policy change Economic data surprise Geopolitical event Seasonality Exit Strategies Stop-Loss Methods
- Percentage Stop
Fixed % below entry Simple and clear Example: 2% below entry
- Support/Resistance Stop
Below key technical level Makes technical sense Varies by setup
- ATR-Based Stop
1.5-2x Average True Range Adapts to volatility Prevents whipsaw
- Time Stop
Exit if no progress in X days Frees up capital Prevents dead money Take-Profit Methods
- Fixed R Multiple
2R, 3R, 4R targets Predetermined exit Consistent methodology
- Technical Target
Previous resistance Fibonacci extension Measured move Pattern target
- Trailing Stop
Move stop as profit grows Lock in gains Ride trends longer
- Partial Profits
Take 50% at 2R Trail remaining 50% Reduces regret Balances risk/reward Position Sizing Formulas Fixed Dollar Risk Position Size = Account Risk $ / (Entry - Stop)
Example: - Account: $50,000 - Risk per trade: $500 (1%) - Entry: $100 - Stop: $97 - Risk per share: $3 - Shares: $500 / $3 = 166 shares
Fixed Percentage Risk Position Size = (Account × Risk %) / (Entry - Stop)
Example: - Account: $50,000 - Risk: 1% - Entry: $50 - Stop: $48 - Risk per share: $2 - Shares: ($50,000 × 0.01) / $2 = 250 shares
Kelly Criterion (Advanced) Position Size % = (Win Rate × Avg Win - Loss Rate × Avg Loss) / Avg Win
Example: - Win rate: 55% - Avg win: $500 - Loss rate: 45% - Avg loss: $300 - Kelly: (0.55 × $500 - 0.45 × $300) / $500 = 28% - Use 1/4 Kelly = 7% position size (conservative)
Warning: Kelly can be aggressive, use fractional Kelly
Trading Psychology Pre-Market Routine Review previous day's trades Check overnight news Identify key levels Plan potential setups Check emotional state Confirm risk limits Emotional State Check
Don't trade if:
Angry or frustrated Desperate for money Revenge mindset Distracted or tired Overconfident Fearful
Green light to trade:
Calm and focused Following plan Accepting of losses Patient for setups Clear-headed Tilt Recognition
Warning signs:
Increasing position size Abandoning stops Taking marginal setups Revenge trading Checking P&L constantly Breaking rules
When tilting:
Stop trading immediately Close all positions Take a break (hour/day/week) Review what triggered it Return when calm Daily Loss Limit
Critical rule: Stop trading at daily loss limit
Example:
Daily limit: -2% of account Account: $50,000 Stop at: -$1,000 loss
Why it matters:
Prevents blowup days Forces you to stop tilting Tomorrow is another day Protects capital Market Conditions & Filters When to Trade Market trending clearly Volatility in normal range Volume above average Your setups present Clear technical levels Emotional state good When NOT to Trade Choppy, rangebound market Major news pending (FOMC, etc.) Low volume (holidays) Extreme volatility No clear setups Emotional/tilting Market Regime Recognition
Bull Market:
Buy dips Longer holds Reduce short exposure Follow momentum
Bear Market:
Sell rips Shorter holds Reduce long exposure Focus on defense
Sideways/Choppy:
Reduce size Take quick profits Avoid breakout trades Trade ranges Performance Tracking Metrics to Track
Win Rate:
% of trades profitable Target: >50% for day trading, >40% for swing
Average Win vs Average Loss:
Avg $ won on winners Avg $ lost on losers Should be 1.5:1 or better
Profit Factor:
Gross profit / Gross loss
1.5 is good, >2.0 is excellent
Expectancy:
(Win Rate × Avg Win) - (Loss Rate × Avg Loss) Must be positive to be profitable
Maximum Drawdown:
Largest peak-to-trough decline Track and improve over time
Sharpe Ratio:
Return / Volatility
1.0 is good
Trade Journal Requirements
For each trade log:
Date and time Ticker/instrument Entry price and size Stop-loss and target Exit price and reason P&L ($ and %) Setup/pattern Market condition Emotional state Mistakes made Lessons learned Screenshot Review Schedule
Daily:
Review all trades Calculate P&L Note mistakes Plan next day
Weekly:
Calculate weekly metrics Identify patterns Best/worst trades Rule compliance %
Monthly:
Full performance review Strategy adjustments Goal progress Mindset check Common Mistakes to Avoid ❌ Fatal Errors
- No Stop-Loss
One bad trade can wipe account ALWAYS use stops No exceptions
- Overleveraging
Position size too large Can't handle normal volatility Forced exits at worst time
- Revenge Trading
Trading to "get back" losses Emotional decisions Breaks all rules
- Moving Stops
Moving stop to avoid loss Invalidates risk management Path to blowup
- Averaging Down Losers
Adding to losing position Doubles down on mistake Increases risk dramatically
- No Plan
Winging it Inconsistent decisions Can't improve ✅ Best Practices
- Risk < Reward
Always 2:1 R:R minimum Selective trading Math works in your favor
- Consistent Sizing
Same risk each trade Removes emotion Sustainable growth
- Follow Your Plan
Even when uncomfortable Trust the process Track compliance
- Take Breaks
After losses When tilting Regularly
- Keep Learning
Review trades Study markets Adapt and improve Using This Skill Generate a Trading Plan ./scripts/generate_plan.sh
Interactive workflow guides you through:
Trading style and goals Risk management rules Market and setup selection Entry and exit criteria Psychology and discipline Performance tracking Validate Your Plan ./scripts/validate_plan.sh path/to/plan.md
Checks for:
Risk management defined Position sizing rules Entry/exit criteria Stop-loss requirements Performance tracking Completeness Calculate Position Size ./scripts/position_calculator.sh
Quick calculator for:
Shares based on risk Risk amount R:R ratio Compliance check Access References references/risk_management.md - Complete risk frameworks references/trading_psychology.md - Mental game and discipline references/technical_setups.md - Chart patterns and entries references/performance_metrics.md - Tracking and improvement
Trading Plan Checklist Clear trading goals defined Risk per trade specified (1-2% recommended) Daily loss limit set and hard stop Position sizing formula defined Markets traded clearly identified Entry criteria specific and measurable Stop-loss rules mandatory for every trade Take-profit strategy defined Trade management rules for scaling Emotional checks before trading Trade journal template ready Performance metrics to track Review schedule committed to Quick Start Beginner Trader Template Risk: 0.5% per trade Style: Swing trading Daily loss: -1.5% Minimum R:R: 3:1 Simple technical setups Conservative sizing Experienced Trader Template Risk: 1-2% per trade Style: Your preference Daily loss: -3% Minimum R:R: 2:1 Advanced setups Discretionary management Important Disclaimers
This skill provides frameworks, not financial advice.
Trading involves substantial risk Past performance ≠ future results Only trade with risk capital Educate yourself thoroughly Consider working with professionals Comply with all regulations You are responsible for your decisions
Risk Warning:
You can lose all your capital Leverage amplifies losses Emotional control is critical No guaranteed profits Most traders lose money Best Practices 1. Start Small Paper trade first Then micro positions Prove profitability Then scale up 2. Focus on Process Not on money Follow rules Track metrics Improve systematically 3. Protect Capital Risk management first Survive to trade tomorrow Slow and steady wins 4. Stay Disciplined Plan your trades Trade your plan No exceptions Review constantly 5. Keep Learning Markets evolve Adapt strategies Learn from mistakes Study the best Summary
A trading plan is your blueprint for success. It:
Protects your capital with risk management Guides decisions with clear rules Controls emotions through discipline Tracks performance for improvement Builds consistency over time
Remember: The goal isn't to get rich quick. It's to trade consistently, manage risk properly, and compound gains over time.
"Plan your trade, trade your plan, and manage your risk. Everything else is noise."