How to Build a Trading Plan You’ll Actually Stick To

With today’s FOMC meeting, there’s likely going to be volatility in the market.

But here’s a secret for you. It’s what separates the pros from the amateurs: Discipline isn’t optional — it’s the foundation of every successful trader’s results.

A trading plan keeps you focused on strategy instead of emotions. Without one, you’re reacting to markets instead of executing a process.

Every time I work with students, I emphasize creating a repeatable plan. That includes your entry criteria, exit rules, risk controls, and even the time of day for trading.

You’re building a framework that lets you trade with consistency, even in volatile markets.

Most traders fail because they treat the market like a casino. A solid trading plan puts you back in control.

The Importance of Writing Down a Clear Strategy

Writing down your trading strategy forces clarity. It makes you think about your rules, timing, indicators, and risk.

If it’s not written, it’s just a loose idea — and loose ideas lead to random trades. (Remember, randomness doesn’t lead to consistency.)

Your plan should include:

This will help you avoid getting pulled into random trades that don’t fit your plan.

I’ve kept written plans since my early days because it holds me accountable. It’s not about being perfect. It’s about being prepared.

Practicing Safely With Backtesting and Paper Trading

Before you risk real money, practice your strategy.

Backtesting helps you see how your setup performs in different market conditions using historical data. Paper trading lets you test your execution and discipline in real time without financial risk.

These tools are underused by most beginner traders, who want to “skip ahead” to the profits.

But the experience you gain from testing will save you from making emotional or expensive mistakes later.

I’ve had students spend months paper trading before ever funding a real account — and they often end up more consistent than those who rush in too fast.

Setting Realistic Profit and Loss Goals

Setting goals keeps your trading focused and removes the pressure of unrealistic expectations.

If you expect to double your money every month, you’re setting yourself up for frustration and bad trades. Focus instead on consistency and progress.

Define your goals in percentages or risk units. Know your daily, weekly, and monthly limits — both for gains and losses.

If you hit your max loss, stop trading for the day. That’s how professionals manage themselves.

I tell students all the time: realistic goals protect your mindset as much as your account. You want to build a process, not chase a jackpot.

Defining Exact Entry and Exit Rules Before Trading

Exact entry and exit rules remove the guesswork.

You should know the price level, volume conditions, and chart setup that trigger a trade. That way, you’re following your plan — not reacting to price action in the moment.

Include both technical indicators and psychological criteria.

For example, only trade breakouts above resistance with news catalysts, and only if volume is above average. Exit either at your profit target or if the stock falls below key support.

This level of detail in execution is what separates amateurs from professionals. I’ve seen traders fail simply because they couldn’t stick to their own rules.

Bottom line: Consistency > homeruns.

Always.

Tomorrow, we’re going to talk about something even more important…

Your psychology — because the market doesn’t just test your strategy, it tests YOU.

If you have any questions or just want to introduce yourself, email me at SykesDaily@BanyanHill.com.

Cheers,

Tim Sykes
Editor, Tim Sykes Daily