Two levels: the account rules and the trade plan
The account rules apply to every decision: maximum risk per trade, total exposure, number of simultaneous positions, daily or weekly loss beyond which you stop. The trade plan, on the other hand, describes one specific scenario. The second can never override the first.
The elements of a trade plan
- Hypothesis: what you think will happen, and why, in one or two sentences.
- Evidence: the data that supports it, its source and its timestamp.
- Counter-arguments: what contradicts the hypothesis. If you cannot find any, you have not looked hard enough.
- Entry: the price or the trigger condition.
- Invalidation: the level at which the hypothesis is wrong, which becomes the stop (see where to place your stop-loss).
- Size: the quantity calculated from the loss budget, the distance to the stop and the fees.
- Target and exit: the level aimed for, any partial exit, and an exit after a set time if nothing happens.
- Cancellation: the conditions that make you give up before entering.
A complete plan, on a fictitious example
Fictitious asset XYZ, working capital of €10,000
- Hypothesis: after a pullback, the price stabilises above the €96–98 zone and resumes its uptrend.
- Evidence: underlying uptrend, recent low at €96.40, data checked less than an hour old.
- Counter-argument: falling volume on the rebound; an earnings release is scheduled in three weeks.
- Entry: €100. Stop: €96, i.e. a distance of €4.
- Loss budget: 1% of capital, i.e. €100, including €8 of estimated costs. Quantity: 92 ÷ 4 = 23 units, i.e. €2,300 committed.
- Theoretical loss at the stop: 23 × 4 + 8 = €100.
- Target: €108. Planned net gain: 23 × 8 − 8 = €176. Net ratio: 1.76.
- Time exit: if neither the stop nor the target is reached after ten trading sessions, exit and review.
- Cancellation: no entry if the price opens below €98, or if the position would still be open on the earnings date.
The 1% is there to keep the example readable; it is not a risk recommendation suited to your situation.
Knowing when not to trade
A plan that cannot find a logical stop, whose risk/reward ratio does not cover the fees, or whose data is too old, ends in not trading. That is a valid outcome, and it deserves a line in the journal just like a trade.
After the decision
The plan becomes the reference for the trading journal: on exit, you compare what was done with what was written. To practise without committing money, the same plan can be executed in paper trading.
The BULLSAGE Coach follows the same logic: analyse the evidence, prepare the entry, the size, the invalidation and the targets, then decide. It organises this work; it does not promise the result and is not personalised financial advice.
Get the trading plan kit (PDF)
The plan to fill in, the eight questions to ask before acting, the position size calculation and a journal template. You will also be told when the platform opens, on 1 January 2027.