A TRADING PLAN TEMPLATE.

A trading plan is a written answer to every decision you'd otherwise make in the moment. When do you trade at all? Which stocks, which setups? Where do you get in and out, how much do you risk, and when do you stop for the month?

Write those answers down in advance and they stop being moods. They become rules.

The document itself isn't really the point, though. What matters is what it makes possible.

A rule you've written down can be checked: did I follow it today, yes or no? And a rule you can check can be improved, because your journal will show what following it (and breaking it) actually cost. A plan that lives in your head can't be tested, so it drifts with every winning and losing week.

Why write it down

Experienced part-time traders write down their rules of engagement (what they buy and how they sell) before they build a single watchlist. Specific rules make decisions quick, and vague ones slow you down right when it counts. The shortest version is this: no setup, no trade.

A plan also gives the day a shape. You decide before the open whether the day is one for offence or defence. If you set your price alerts about 30 minutes before the open, the trading itself is mostly execution.

And when a losing streak arrives, as it will, the plan is what tells you whether you're trading badly or the market is. If you followed the plan, it's the market. If you didn't, your mistake tags will show you where.

Keep it short. If you can't hold the plan in your head during the first hour of the session, you won't follow it. One page is a good limit.

The nine sections

1. Market filter: when to trade, and how hard

The same setup that works in an uptrend loses in a correction, so your first rule decides whether to trade at all.

Qullamaggie's filter is a traffic light on the index: is the 10-day average above the 20-day, and are both rising? He leaves the response to yellow and red up to you.

Breadth readings help too, and it pays to avoid new risk when the S&P 500 is very extended above its 50-day. Write down what each state means for size and trade count, not just whether it's "good". See market environment and your edge.

2. Universe: which stocks you look at

Qullamaggie scans for the top 1–2% of performers over one, three and six months, and rescans weekly. A common minimum is an average daily range of at least 3%, ideally 4–5% or more, and many momentum traders stick to stocks above 5%.

Add a liquidity floor as well. Qullamaggie's stream notes suggest daily dollar volume of at least 200 times your position size.

Then narrow it down. qullamaggie.net describes a funnel from a universe of a few hundred names to a weekly focus list of 5–20, and a daily list of fewer than five. See relative strength, ADR and how to find stocks to swing trade.

3. Setups: the trades you take

Pick one or two, and describe them well enough that someone else could find them. Qullamaggie's advice to beginners is to start with plain breakouts, and to expect two to three years to master a setup.

Each setup needs a checklist, the way a good model book is built: the prior move, the base length and shape, where the moving averages are, and any catalyst. These become your setup tags.

Deep dives: breakouts, episodic pivots, pullbacks to the moving averages, the VCP and bull flags and high tight flags.

4. Entry trigger: the exact moment you buy

A setup is a reason to watch. A trigger is a reason to buy.

Qullamaggie buys as price takes out the high of the first 1-, 5- or 60-minute candle, and he prefers buying the break to anticipating it. Some traders wait five minutes on a gap.

Another common rule is to wait 30 minutes, skip the trade if the low of the day is already more than 60% of the ATR away, and open at most three new positions per session.

Write down the trigger, the no-go conditions and the daily limit. See opening range high entries and swing trading entry techniques.

5. Stops: where you are wrong

Qullamaggie puts the stop at the low of the entry day, and never wider than the stock's ADR. Some traders cap it at half the ADR. Another common limit is never more than 12%, whatever the ADR, with hard stops placed at entry rather than mental ones.

Two rules belong in every plan. The stop goes in the moment you're filled, and it never gets lowered. See stop loss placement and the half-ADR stop.

6. Position sizing: how much you risk

The share count is just arithmetic: account × risk per trade ÷ (entry − stop). The judgement is in the risk percentage.

Qullamaggie usually risks 0.25–1% per trade and keeps most positions at 10–20% of the account, with no more than about 30% in one name overnight.

Then decide how your size changes with results. Progressive exposure is Mark Minervini's principle of trading biggest when you're trading best. A risk ladder makes it mechanical, stepping between 0.12%, 0.25%, 0.5% and 1% risk after each pair of wins or losses. See how much to risk per trade.

7. Exits: how you get paid

Qullamaggie sells a third to a half after three to five days, moves the stop to break-even, and trails the rest on the 10- or 20-day moving average, selling on the first close below it. He also sells anything that goes nowhere for three to five days. Others stage their exits by time, R and extension.

Write down the partial, the trail, the time stop and what you do before earnings. See swing trading selling techniques, selling into strength and 10-day or 20-day.

8. Risk limits: the account-level brakes

A stop limits one loss. These limit a bad month.

One common cap is monthly losses of 5% of equity. Another is holding no more than two positions whose stops are still below break-even. A cap on new positions per day helps too.

Add what happens to your size after a losing run, and the rule that you never raise risk to win a loss back. See drawdowns and losing streaks.

9. Review routine: how the plan improves

A periodic review is non-negotiable. Tag every trade, grade the day on whether you followed the plan, and once a month look at your results by setup and the cost of each mistake.

Only change rules at the monthly review, and only with enough trades behind the change. A good rule is 20–30 trades of a setup before you judge it. See how to review your trades.

A filled-in example plan

Here's one plan built from the rules above, for a part-time swing trader trading breakouts and earnings gaps.

Its core is a breakout through a tight base with a stop at the low of the day, a third sold at the close of day 3, and the rest trailed on the 21-day EMA. That's the plan behind our 544-trade breakout backtest, where the 21-day trail made about half as much again as the 10-day (+257.8R against +168.0R).

The specific limits are one reasonable choice, not a recommendation. Yours should come from your own numbers.

A few of the choices in it are worth explaining. The yellow state is the trader's own rule, since Qullamaggie leaves that part open. The sizing ladder is a three-step version of the four-step ladder above, starting from 0.5% rather than 0.12%.

The two-position limit and the earnings rule's 2R cushion come from the same rules. Everything else is taken directly from the sources above.

Your blank template

Copy it into your notes, fill in each line, and keep it to one page. If you're unsure about something, write the simplest rule you'd actually follow, and let the monthly review refine it.

Using the plan day to day

• Before the open: read the market filter and write down the state. Check the daily list, where each name already has its trigger, stop and size worked out. Set the alerts.
• At the open: execute only what's on the list. If a trade isn't there, it isn't in the plan.
• After the close: tag the day's trades, mark any rule you broke, and grade the day on adherence, not on P&L. A losing day that followed the plan is an A.
• Monthly: look at results by setup tag and the R lost to each mistake tag. If one rule keeps getting broken, either the rule is wrong or the habit is expensive, and the numbers will tell you which.

Expect the plan to change. Even good traders treat their rules as guides rather than laws, and Qullamaggie's advice is to do more of what works and less of what doesn't.

What a written plan changes is that you adjust it on purpose, at the review, rather than in the middle of a trade.