An operational trading plan
01 / Qualify
Separate the setup from the trigger
A setup describes the context that makes a situation worth watching. A trigger is the observable condition that says your written rule is active. If the trigger is vague, you can end up redefining it to fit whatever happens.
Before the session, write both in plain language. Prefer conditions another person could recognize over impressions such as “looks strong.” Note what information or confirmation you need, and when the setup expires. If the condition never appears, the plan has not triggered.
Write it as a rule
“If [observable setup] and [defined trigger] occur before [expiry], then I consider only [permitted action].”
02 / Decide
Define what the trigger permits
A trigger is not an instruction to act at any cost. Decide in advance which responses are allowed: for example, prepare an order, wait for another condition, or pass. If you do act, record the entry method, intended exit logic, and whether any later adjustment or re-entry is allowed by the plan.
- What exact action is allowed when the trigger occurs?
- What would make you wait or skip instead?
- Which changes are explicitly off-limits during the session?
“No trade” is a valid planned decision. If the trigger is absent, the setup expires, or required information is unavailable, do not invent a substitute condition in the moment.
03 / Invalidate
Write down what proves the plan wrong
Invalidation is a specific condition that removes the basis for the idea—not simply discomfort when a position moves against you. Distinguish between a condition that cancels a setup before entry and the exit condition that applies after a position is open. Record what you will do at each point.
Also define operational invalidation: a missing data feed, an unplanned event in your process, or a platform interruption may mean pausing rather than improvising. Clear invalidation rules make it easier to step away when the original reasoning no longer applies.
04 / Bound risk
Set risk limits before considering an entry
Document the maximum planned exposure for an individual idea and for the session, along with a pause rule if that limit is reached. If your process uses a stop, position size can be calculated from the predefined risk limit and the distance to that stop; do not choose size first and fit risk around it later.
- Account for open positions and exposure that may move together.
- State what happens if an order is rejected, delayed, or partially filled.
- Do not widen a planned exit or add exposure unless a written rule allows it.
A planned limit does not remove market, execution, or technology risk, and it cannot guarantee a particular outcome. Use controls as boundaries for your process, not as promises about results.
05 / Review
Close the loop with a short journal
After the session, spend a few minutes capturing the plan and what actually happened. Keep the record factual so the next review can separate rule quality from whether one decision happened to work out.
- AWhat setup and trigger did I write before the session?
- BDid I follow the permitted action, invalidation, and risk rules?
- CWhat one question should I review later—without changing rules mid-session?
Record any deviation and its reason, then review patterns on a regular schedule. Change one rule at a time only after deliberate review; avoid rewriting a plan solely to explain a single outcome.
Keep learning
Build better decisions one lesson at a time
The CirexAI Weekly Newsletter shares practical education on trading structure, risk discipline, and decision-making. Explore the existing newsletter offer and continue through its current signup and checkout flow.
Explore the Weekly NewsletterCirexAI provides educational content and tools, not individualized investment advice. Trading involves risk; this guide does not predict or guarantee results.