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School of Trading (education only)

Trading Plans & Psychology: rules and discipline

Step 8 of 9 in Trading Floor

Next in your path: 5.5.4 Professional Risk & Regulation: institutional risk and research methods

What you'll be able to do
  • Write a complete, versioned trading plan for paper trading, with every section a stranger could check.
  • Turn vague intentions into if-then rules that two people would judge the same way.
  • Build a system of risk limits and "circuit breakers" that stop practice trading before feelings take over.
  • Use a pre-trade checklist and a pre-mortem to catch mistakes before they happen.
  • Measure your own behaviour on paper trades: rule adherence, early profit-taking, held losers and overtrading.
  • Run weekly and monthly reviews and change your plan safely, one version at a time.
  • Produce a graded "Plan and Discipline Report" built only on paper trades.

This course is education only. It teaches how to write rules and watch your own behaviour. It gives no signals, no trade ideas and no recommendations to buy or sell anything, it does not say that any setup or style "works", and it does not promise any income. Most active retail traders lose money (course 5.11.2, Lesson 7), and past results do not predict future results. Every exercise uses paper trading, demo accounts or made-up numbers only. Before any decision with real money, speak to a licensed professional who is registered in your country.

Before this course: Trading Styles Compared: time, capital and psychology (course 5.11.2), and before it Types of Trading (course 5.11). You have built a Style Comparison Dossier: time ledger, cost drag, capital and leverage maths, losing-streak table and the evidence page. You also met the common traps (revenge trading, loss aversion, FOMO, overconfidence) in courses 5.5 and 5.11.2. We do not repeat those. This course turns them into a written plan and measures whether you actually follow it.

Words in this course 59
Change controlCircuitCorporationDemerit pointsDiscountDispositionDOIDragDrawdownFillFOMOGender (grammatical)HTMLHTTPSImplementation intentionLeverageLoss aversionMajor and minorMeanMediationMicrosoft TeamsModesOverconfidencePaper tradingPDFPercentage pointsPlain formPosition sizePowerPre-mortemProjectProject (Claude)Prompt templateRebalancingRegulated occupationReleaseRevenge tradingRiskRisk per tradeRubric
Open the Vocabulary Hall
01

Before you start: what a written plan is for

In simple words

A pilot does not decide how to land while the plane is shaking. The plan is written on the ground, when everyone is calm. A trading plan is the same: you write it when nothing is happening, so the calm you makes the choices for the stressed you.

Key facts
  • Education only. The plan in this course is for paper trading. Writing a plan does not make trading safe or profitable.
  • Before this course: Trading Styles Compared (course 5.11.2). Use your dossier to pick one style to practise on paper. Picking a style to practise is not a recommendation to trade it.
  • A plan is a pre-commitment: decisions made in advance so you have fewer decisions to make under stress.
  • Sections of a complete plan:
SectionWhat it answers
1. Purpose and limitsWhy you are practising, for how long, and "paper only"
2. Markets and hoursWhich demo markets, which hours, which days you do not trade
3. Setups (if-then rules)Exactly what must be true to enter, exit or do nothing (Lesson 2)
4. SizeHow position size is calculated from the risk amount (course 5.12, Lesson 6)
5. Limits and circuit breakersPer trade, per day, per week, drawdown pause (Lesson 3)
6. Pre-trade checklistThe questions you answer before every entry (Lesson 4)
7. RecordsWhat you log for every trade, including "rule followed: yes/no"
8. ReviewWhen and how you review (Lesson 7)
9. Change rulesHow and when the plan may be changed, with a version number
  • A plan has a version number (v1.0, v1.1 ...) and a date, like software. You always know which rules a trade was made under.
  • Failure modes:
  • A plan that lives only in your head.
  • A plan full of words like "good", "strong" or "when it feels right".
  • Copying someone else's plan without knowing why each rule is there.
  • Changing the plan in the middle of a session.
Step by step
  1. Open a new document and title it "Trading Plan v1.0 (paper only)" with today's date.
  2. Copy the nine section headings from the table.
  3. Under "Purpose and limits", write how long you will practise (for example 8 weeks) and the sentence "Paper and demo only; no real money."
  4. Under "Markets and hours", copy the hours that fit you from your time ledger (course 5.11.2, Lesson 2).
  5. Leave sections 3 to 9 marked "to do". You will fill them in during the course.
  6. Save the file where you will see it every day.
  7. Check: the plan has a version number, a date, nine headings and the words "paper only".
Watch on YouTube
Your trade plan objectiveCME Group · YouTube · youtube.com

Videos by other creators on YouTube, for reference. They are not made by or affiliated with The Future Market.

LESSON 01Before you start: what a written plan is for
LESSON 01 / ANIMATED LESSON / AI VOICE00:00 / 01:00
Read the video script
[Host] "Pilots plan the landing on the ground, not in the storm."
[Text on screen: a plan is a pre-commitment] "A trading plan is decisions made in advance, while you are calm."
[Screen: nine section headings from purpose to change rules] "Nine sections: purpose, markets and hours, setups, size, limits, checklist, records, review and change rules."
[Text on screen: Trading Plan v1.0, paper only] "Give it a version number and a date, and write 'paper only' at the top."
[Host] "A plan does not make trading safe. It makes your behaviour visible. Education only."
Try it now

Create your Trading Plan v1.0 document with all nine headings, the purpose and the hours filled in, and "paper only" at the top. Do not place any trade.

ClaudeStuck? Copy a ready-made prompt for Claude

Copy this, open Claude, paste it, and Claude will walk you through the lesson step by step.

For a grown-up: Claude is for adults (18+). Copy this, paste it into Claude, and use the answer to explain the lesson to your child.

I'm learning "Trading Plans & Psychology: rules and discipline" on The Future Market. Lesson 1: "Before you start: what a written plan is for".

What the lesson teaches:
- Education only. The plan in this course is for paper trading. Writing a plan does not make trading safe or profitable.
- Before this course: Trading Styles Compared (course 5.11.2). Use your dossier to pick one style to practise on paper. Picking a style to practise is not a recommendation to trade it.
- A plan is a pre-commitment: decisions made in advance so you have fewer decisions to make under stress.
- Sections of a complete plan:
- Section - What it answers
- 1. Purpose and limits - Why you are practising, for how long, and "paper only"
- 2. Markets and hours - Which demo markets, which hours, which days you do not trade

The exercise I'm working on:
Create your Trading Plan v1.0 document with all nine headings, the purpose and the hours filled in, and "paper only" at the top. Do not place any trade. ---

I'm stuck. Please:
1. Explain the main idea in plain, simple words with one everyday example.
2. Walk me through the exercise one small step at a time. Ask me what I've done so far before giving the next step.
3. Don't just give me the final answer. Help me do it myself, and check my work when I share it.
4. This is for learning only. Remind me to check with a licensed professional before I make a real decision about my own money, health or legal situation.
I'm a parent helping my child (about 8 years old) with a lesson called "Before you start: what a written plan is for" from the course "Trading Plans & Psychology: rules and discipline".

Here's what the lesson says:
A pilot does not decide how to land while the plane is shaking. The plan is written on the ground, when everyone is calm. A trading plan is the same: you write it when nothing is happening, so the calm you makes the choices for the stressed you.

The activity:
Create your Trading Plan v1.0 document with all nine headings, the purpose and the hours filled in, and "paper only" at the top. Do not place any trade. ---

Please explain this so an 8-year-old understands: short sentences, a fun everyday example, and no hard words.
Then give me 3 simple questions I can ask my child to check they understood, and a way to do the activity together, one tiny step at a time.
Keep it general and educational. This is not advice for a real situation.
Open Claude
My notes
02

Writing rules that can be checked

This lesson is part of full access: every course and every level for one payment.

03

Risk limits and circuit breakers

This lesson is part of full access: every course and every level for one payment.

04

Checklists, routines and the pre-mortem

This lesson is part of full access: every course and every level for one payment.

05

Measuring your own biases on paper trades

This lesson is part of full access: every course and every level for one payment.

06

Process versus outcome: scoring discipline

This lesson is part of full access: every course and every level for one payment.

07

Reviews, plan changes and knowing when to stop

This lesson is part of full access: every course and every level for one payment.

++

Final project

This lesson is part of full access: every course and every level for one payment.

??

Quiz

  1. Why write a trading plan in advance?

  2. Why does a plan need a version number?

  3. What is the two-person test for a rule?

  4. Rewrite "cut losses quickly" as a checkable rule.

  5. With 1% risk per trade and a 2% daily limit, how many full losses end the day?

  6. When may limits be changed?

  7. What is a pre-mortem?

  8. What is the disposition effect?

  9. Why treat bias numbers from 30 paper trades as warning lights only?

  10. Which of the four boxes is the most dangerous, and why?

  11. How many changes should you make to the plan at one review?

  12. What should you check before paying anyone for trading help?

EX

Final exam

This lesson is part of full access: every course and every level for one payment.

CE

Certificate

This lesson is part of full access: every course and every level for one payment.