Tag Archives: Documentation

My Post-It Note Trading Plan

“Simplicity is the ultimate sophistication.”…Leonardo da Vinci

How detailed should your trading plan be?

There is of course no right answer apart from whatever works best for you. Some people need detail – lots of it. Others will never need more than a single page, with anything longer simply gathering electronic dust as it sits unread on your hard-drive.

But here’s my thoughts…

You need to create both!

  1. A large detailed plan
  2. A small conceptual plan


Well, firstly, even if all you want is a small summary plan, then you can’t properly write that unless the detailed one is produced first. To be effective, a small plan must summarise the key components of a thorough and detailed plan.

But there is a deeper reason as well… the process of producing both versions will provide you with increased clarity regarding both how you trade and why your plan should work.

Produce a large and detailed plan because the process of getting every aspect of your trading business onto paper will ensure a thorough and detailed knowledge of your business operations; increasing likelihood of considered and pre-planned actions rather than emotional and unplanned reaction to price movement. It doesn’t matter if you don’t refer to it again, preferring to use your summary version. It’s the process that is important.

Produce a single page summary because the process of simplification helps cement in your mind a deeper understanding of the key aspects of your plan. It doesn’t matter if you prefer to work from a detailed plan in future; again, it’s the process that is valuable.

I also recommend you take it one step further:

  1. You need to be able to define your whole trading approach in one short paragraph; something that fits on a Post-It Note*.



The Need for Trading Rules


Hi Lance,

I read from another resource that in order to detach your emotion in every trade you need to have a set of written specific rules about your entry, your position size, your exit and any other possibility that might happen in that trade and you need to follow it with “marine discipline” to make your success in trading business. What do you think about this statement? Do you also have specific and written trading rules?

Thanks and Regards