Writing a risk plan

You have built every piece of a risk system in this level. This lesson puts them on one page. A risk plan is not a trading strategy. It does not say what to buy or sell, or when. It says how much you are allowed to lose, and what you do when things go wrong.

The aim is a plan you will actually follow. A long, clever document that you never read is worth less than five lines you check every day.

Rules for writing the plan

• One page. If it does not fit, cut it.
• Numbers, not feelings. “Risk $50 per trade” can be checked. “Don’t risk too much” cannot.
• Yes or no. Every rule should be something you can answer with yes or no after the session: “Did I stop at my daily limit?”
• Written while calm. You write and change the plan outside trading hours, never in the middle of a session.

The template

Copy this onto paper or into a document and fill in your own numbers. Every number is your decision; the blanks are there on purpose, and this course does not fill them in for you.

MY RISK PLAN (date written: ________ ; next review date: ________ )

1. What I trade Instrument(s): ________ (for example MES or MNQ; micros while learning, Lesson 9) Hours I trade (CT): ________ to ________

2. Account and money Account type: personal / funded program (Lesson 12) This is risk capital I can afford to lose: yes / no Starting balance, or the firm’s maximum loss if funded: $________

3. Risk per trade (Lesson 2) Method: fixed dollars / percent of balance My number: $________ or ________ percent

4. Stops (Lesson 3) Every trade has a stop placed at entry: yes I place it where my idea is wrong, then size to fit I never move a stop further away: yes

5. Position sizing (Lesson 4) Contracts = risk per trade divided by (stop points times dollars per point), rounded down If the answer is 0, I skip the trade: yes Maximum contracts at once, whatever the math says: ________

6. Reward-to-risk (Lessons 5 and 6) I write down entry, stop, and target before entering: yes I track my win rate and average win and loss so I can work out my expectancy: yes

7. Daily and weekly limits (Lesson 7) Daily loss limit: $________ (that is ______ full losses) Maximum trades per day: ________ Weekly loss limit: $________ When I hit a limit: close, cancel orders, step away, journal, return next session at normal size

8. News, overnight, and weekends (Lesson 10) I check the day’s scheduled releases before trading: yes Into major releases I am: flat / holding at size ________ I hold overnight: never / only at size ________ I hold over the weekend: never / only at size ________

9. Changing size (Lesson 9) I step up only after: ________ (for example, a set number of sessions with every rule followed) I step down when: ________ (for example, a set drawdown, or any broken rule)

10. Review After every session I answer: did I follow every rule above? yes / no If no: which rule, and what happened? ________ Plan changes are made only on my review date.

Using it

Before the session: read the page. It takes one minute. Check the news section against the day’s calendar.

During the session: keep it visible. When you are unsure, the page decides, not your mood.

After the session: go down the list and mark each rule followed or broken. You will build on this in Seat Holder, where journaling and trade reviews turn these checkmarks into patterns you can learn from.

When the plan is wrong

Sometimes a rule turns out to be badly set: a daily limit too tight to ever take a second trade, or a risk number that makes every loss painful. That is normal. Fix it on your review date, with a clear head, and write down why. Do not fix it mid-session, and do not fix it right after a loss, because that is exactly when the plan is supposed to protect you from yourself.

Why this matters

Lesson 1 began with the regulators’ warnings: the CFTC’s required risk disclosure says futures losses can exceed what you deposit, and the NFA advises trading only with risk capital. Your plan is how you turn those warnings into daily behavior. It will not make you profitable by itself. What it can do is keep each loss, each day, and each bad week small enough that you are still trading while you learn.

That is how you keep your seat.

Key ideas

• A risk plan is one page of limits, not a strategy.
• Use numbers and yes-or-no rules that can be checked after each session.
• Cover: instrument and hours, risk per trade, stops, sizing, reward-to-risk tracking, daily and weekly limits, news and overnight rules, changing size, and review.
• Read it before, keep it visible during, and check yourself against it after every session.
• Change it only on your review date, never mid-session or right after a loss.