Four lines written before entry, or you do not have a trade

The plan you make after entry is written by someone who owns the position. That person is a poor analyst. Every number they pick gets negotiated with a live profit and loss.

In practice it looks like this. You spot a level on QQQ at 9:38 and the candle looks right. The move is starting without you. So you buy calls at 9:41, with no stop price and no target on the page.

At 9:46 the contract is down 18 percent. Now you are deciding whether that is noise, with the account already smaller. Whatever you choose, you cannot tell afterwards whether the idea was wrong or your reaction was.

A written plan fixes one thing. It moves every decision to a moment when you have nothing at stake. That is the whole mechanism. Four fields, filled in before the order goes in, make the trade gradeable later.

Conditions: what has to be true for this trade to exist. Name the level, the candlestick pattern that formed at it, and whether volume showed up on the reaction. If you cannot point at all three, you are looking at a chart rather than a setup.

Entry: the exact price you will pay, and for options the exact contract. Which expiry, which strike, how far in or out of the money. Buy calls is not an entry.

Stop: the price at which you are wrong. Write it as a level and a trigger, for example a 5-minute close below 512.40. Decide it now, because you will never like it later.

Target: where you are taking it off, read from the chart rather than from what you would like to make. It has to be a place price could realistically reach, usually the next zone. If the answer to any of the four is we will see, close the platform and wait.

When you cannot fill in the stop, the real problem is usually that you cannot find the level. The blank field is the setup telling you it is not clean enough to trade.

The four fields make the trade falsifiable before it exists. You have written down, in advance, what would prove you wrong and what would prove you right. Every entry after that is a claim with a receipt attached.

This also kills two expensive habits. You cannot move a stop you already published to yourself without noticing you did it. And you cannot claim afterwards that you always planned to hold longer. The target is sitting there in your own handwriting.

The plan will not make you right more often. It makes the record honest, which is the thing that lets you improve the plan.

A losing trade with all four fields filled and followed is a good trade. A winning trade you improvised is a warning. Track profit and loss alone and those two get the same score, so you learn the wrong lesson from both.

Keep two columns in your journal. One is the result in R, the multiple of your planned risk. The other is a plan grade: did you write all four fields, and did you follow them?

After twenty or thirty trades you can sort by grade rather than by result. Followed plans that lose money point at the plan. Broken plans that made money point at you. The second group is the dangerous one, because the money rewards the habit and you repeat it.

Copy this into a note and fill it in before every entry. It should take under a minute once the fields are familiar. If one is still empty when you finish, you have saved yourself a trade.