Lesson 6 of 6 12 min read
Writing a complete trade plan
Entry, invalidation, targets and size — before you click.
The four parts
Entry zone, invalidation (where the idea is wrong), targets (where you take profit) and position size. If any is missing, the plan isn't finished.
Risk-to-reward
Compare distance to target with distance to stop. A 1:2 plan risks $1 to aim for $2. Favourable ratios mean you can be wrong often and still stay in the game.
Pre-commit
Write the plan down before entering. Emotions run high in open trades; a written plan keeps decisions made while calm.
Key takeaways
- Entry, stop, targets, size — all four, always.
- Know your risk-to-reward before entering.
- Decide while calm, execute the plan.
Exercise
Write a full plan for a hypothetical BTC trade using the four parts. Calculate the risk-to-reward.
Educational content only, not financial advice. Crypto is volatile and you can lose money.