Trading plan in gold trading

A trading plan is a written document that defines how you trade before you trade: which markets and sessions, which setups qualify, how entries, stops and targets are placed, how much is risked per trade and per day, and how results are reviewed. It turns a vague method into rules that can be followed, measured and improved.

How it applies to gold trading

Gold punishes improvisation. News spikes, session opens and rollover spreads all tempt traders into unplanned entries. A good gold plan names the sessions you trade (for example London open and New York morning), the events you avoid or trade differently (CPI, NFP, FOMC), the setup criteria in a checklist, the maximum risk per trade and per day, and what happens after a set number of losses.

The plan is also the basis of the journal. Each trade can be marked as “in plan” or “out of plan,” which separates a strategy problem from a discipline problem.

Worked example

Example (hypothetical numbers): plan rules say risk 0.75% per trade, maximum three trades a day, stop trading for the day at -2%, no new trades 15 minutes either side of high-impact US data. On a $8,000 account that is $60 per trade and a $160 daily stop. After two losses and a scratch, the trader stops for the day rather than taking a fourth setup.

A common mistake

Writing a plan once and never reviewing it. Revisit it monthly with your journal statistics.

See also: Pre-trade checklist, Trading journal, Daily loss limit, Risk per trade.

Frequently asked questions