/trading-plan-generator

name: trading-plan-generator
description: Generate comprehensive trading plans with risk management, position sizing, entry/exit strategies, and performance tracking to trade with discipline and consistency.

Trading Plan Generator

A comprehensive skill for creating disciplined, rule-based trading plans that help you manage risk, control emotions, and trade consistently.

What This Skill Does

Helps you create professional trading plans for:

• **Day Trading** - Intraday positions, quick scalps
• **Swing Trading** - Multi-day to multi-week positions
• **Position Trading** - Long-term trend following
• **Options Trading** - Directional and income strategies
• **Investing** - Long-term portfolio management

Why You Need a Trading Plan

**Without a plan:**

• Emotional, impulsive decisions
• Inconsistent position sizing
• No clear entry/exit rules
• Revenge trading after losses
• Account blowup risk
• Can't identify what works

**With a plan:**

• Disciplined, rule-based trading
• Consistent risk management
• Clear decision framework
• Emotional control
• Long-term profitability
• Measurable improvement

**The Stats:**

• 90% of traders fail (most have no plan)
• Professional traders ALL have written plans
• Plan + discipline = edge

Core Components of a Trading Plan

1. Trading Goals & Mindset

• Financial goals (realistic)
• Time commitment
• Risk tolerance
• Trading philosophy
• Success definition

2. Risk Management (MOST IMPORTANT)

• Maximum risk per trade (1-2% recommended)
• Maximum daily loss limit
• Maximum drawdown tolerance
• Position sizing rules
• Stop-loss requirements
• Risk/reward minimums

3. Market Selection

• What markets you trade (stocks, forex, crypto, options)
• Liquidity requirements
• Price range preferences
• Sector focus (if any)
• What you DON'T trade

4. Trading Setup Criteria

• Entry signals (technical/fundamental)
• Confirmation requirements
• Timeframes used
• Pattern recognition
• Market condition filters

5. Entry Rules

• Exact entry triggers
• Order types (market, limit, stop)
• Position sizing calculation
• Scaling in (if allowed)
• Time-of-day restrictions

6. Exit Rules

• Stop-loss placement (hard rules)
• Take-profit targets
• Trailing stop strategies
• Time-based exits
• Scaling out rules
• Break-even stops

7. Trade Management

• When to adjust stops
• When to add to position
• When to reduce size
• When to exit early
• Never scenarios (what you never do)

8. Psychology & Discipline

• Pre-market routine
• Emotional state check
• Tilt recognition
• Break requirements
• End-of-day review
• Accountability measures

9. Performance Tracking

• Trade journal requirements
• Metrics to track
• Review frequency
• Improvement process
• Strategy adjustment criteria

Risk Management Frameworks

The 1% Rule (Recommended for Most Traders)

**Never risk more than 1% of account on single trade**

**Example:**

• Account size: $50,000
• Maximum risk per trade: $500 (1%)
• Stock entry: $100
• Stop-loss: $98
• Risk per share: $2
• Position size: $500 / $2 = 250 shares
• Total position: $25,000 (50% of account)
• Actual risk: $500 (1% of account)

**Benefits:**

• Can survive 20+ consecutive losses
• Removes emotion from sizing
• Consistent risk across trades
• Protects capital

The 2R Minimum Rule

**Only take trades with 2:1 reward-to-risk or better**

**Example:**

• Entry: $100
• Stop: $98 (risk = $2)
• Target: $104 (reward = $4)
• R:R = 2:1 ✅

**Why it matters:**

• Can be profitable with 40% win rate
• Forces selective trading
• Improves overall edge

Maximum Drawdown Limit

**Hard stop trading if down X% from peak**

**Recommendations:**

• Conservative: 10% drawdown → stop trading
• Moderate: 15% drawdown → stop trading
• Aggressive: 20% drawdown → stop trading

**When hit:** 1. Stop trading immediately 2. Review all trades 3. Identify mistakes 4. Paper trade until recovered mentally 5. Resume with reduced size

Trading Styles

Day Trading

**Definition:** Open and close all positions same day

**Characteristics:**

• Multiple trades per day
• No overnight risk
• Pattern Day Trader rules ($25K minimum)
• High screen time requirement
• Quick decisions

**Best for:**

• Full-time traders
• High risk tolerance
• Quick decision makers
• Pattern recognition skills

**Key rules:**

• Never hold overnight
• Reduce size near close
• Stop trading after daily loss limit
• First 30 min often volatile

Swing Trading

**Definition:** Hold positions 2-10 days

**Characteristics:**

• 2-5 trades per week
• Overnight risk acceptable
• Part-time friendly
• Technical + fundamental mix

**Best for:**

• Part-time traders
• Day job professionals
• Trend followers
• Patient traders

**Key rules:**

• Always use stop-losses
• Check positions before/after market
• Respect earnings dates
• Weekend gap risk consideration

Position Trading

**Definition:** Hold positions weeks to months

**Characteristics:**

• Long-term trend following
• Fundamental focus
• Low trade frequency
• Larger position sizes

**Best for:**

• Investors with edge
• Low time availability
• Fundamental analysts
• Macro trend followers

**Key rules:**

• Wide stops (volatility-based)
• Focus on major trends
• Ignore daily noise
• Strong thesis required

Entry Strategies

Technical Entry Methods

**1. Breakout Entry**

• Price breaks above resistance
• Increased volume confirmation
• Wait for pullback or buy breakout
• Stop below breakout level

**2. Pullback Entry**

• Wait for trend pullback
• Enter at support/moving average
• Continuation confirmation
• Stop below support

**3. Reversal Entry**

• Identify overextended move
• Look for reversal signals
• Multiple confirmations required
• Wider stops needed

**4. Pattern Completion**

• Specific pattern (flag, triangle, etc.)
• Pattern completion signal
• Volume confirmation
• Target based on pattern

Fundamental Entry Triggers

**For Stocks:**

• Earnings surprise
• Guidance raise
• Product launch

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