Most traders fail an evaluation not because their strategy is bad, but because it only exists in their head. A plan you can’t read back to yourself is a plan you’ll abandon the moment a trade goes against you.
A written trading plan is the difference between disciplined execution and improvisation under pressure. This guide walks through the five parts every evaluation plan needs — each one specific enough that a stranger could follow it and get roughly the same trades you would.
Define your edge in one sentence
If you can’t describe what you do in a single sentence, you don’t have a plan — you have a collection of habits. Force yourself to compress it: “I buy pullbacks to the prior day’s value area in ES during the first two hours of the New York session, targeting the opening range high.”
That sentence encodes an instrument, a setup, a session, and a target. Everything else in your plan hangs off it. A good one-sentence edge is:
- Specific about context — not “I trade breakouts” but “breakouts from a tightening range after a failed reversal.”
- Falsifiable — you can look at a chart and say “yes, this is my setup” or “no, it isn’t.” No ambiguity.
- Narrow enough to count — if your edge fires forty times a day, it’s too loose to measure.
The edge sentence is also what you’ll be measuring later. If you don’t know exactly what you’re trading, you can’t tell whether it’s working.
Write entry, exit, and invalidation rules
Now expand the sentence into mechanical rules. Three questions must have unambiguous answers before you ever click.
Entry. What has to be true for you to be in? List the conditions in order. If a discretionary read is involved (“momentum looks strong”), define it with something measurable — a moving-average slope, a volume threshold, a candle close beyond a level.
Exit. Where do you take profit, and is it fixed, trailed, or scaled? Write the actual price logic, not “I’ll manage it.” Managing it is where evaluations die.
Invalidation. This is the most important line in your plan and the one traders skip. Where is the price that proves the trade wrong? That’s your stop — decided before entry, sized so the loss is acceptable, and never widened once you’re in. A trade without a pre-defined invalidation isn’t a trade, it’s a hope.
Frame your setups in terms of reward relative to risk so every position is comparable. If you’re new to the concept, the risk/reward calculator turns entry, stop, and target into a clean ratio you can screen trades against.
Set risk per trade and daily limits
Your edge determines whether you make money over time. Your risk rules determine whether you survive long enough to find out.
- Per-trade risk should be a fixed, small fraction of the account — small enough that a normal losing streak can’t threaten your evaluation. Express it in dollars and in your account’s drawdown terms so you always know how many losers a day can hold.
- A personal daily loss cap set tighter than the firm’s limit. If the firm cuts you off at a certain daily loss, you stop yourself well before that — because hitting the firm’s number means you were already out of control.
- A max-trades or max-attempts rule so a frustrating morning doesn’t turn into thirty revenge trades.
Confirm the firm’s exact drawdown mechanics directly with them — the numbers vary and change — then build your personal limits inside those, never up against them.
Add session, instrument, and news filters
An edge that works at 9:45 a.m. often bleeds money at lunch. Your plan should say when you trade, what you trade, and when you stand aside.
- Session windows — the hours where your setup actually has an edge, and a hard rule to close the platform outside them.
- Instrument list — the one or two products you know cold. Evaluations are not the place to explore a new symbol.
- News blackout — a rule for high-impact releases: flat before them, or no new entries for a defined window around them. Slippage during a release can breach a limit in a single tick.
Filters are where discipline is easy to write and hard to keep, which is exactly why they belong on paper.
Make the plan measurable and reviewable
A plan you never check is just a document. The final section is how you’ll know it’s working.
Decide up front what you’ll track for every trade: setup name, whether you followed the rule, the R-multiple result, and one line on your state of mind. Over a few dozen trades this reveals your real expectancy — the average amount you win or lose per trade — which is the only honest verdict on whether your edge survives contact with a live account. Sketch the math ahead of time with the expectancy calculator, and if the term is new, this primer on trading expectancy explains why a modest win rate with good R can still pass.
This is also where automatic journaling earns its keep. Logging every trade by hand is tedious enough that most people quit by day three. Shibiki captures each fill as it happens and computes your live edge health per strategy — with a Wilson confidence interval so you’re not fooled by a lucky first ten trades — while pushing your risk limits down to the broker so the rules hold even on the days your discipline doesn’t. The plan on paper and the plan being enforced become the same thing.
Related: Trading expectancy · Expectancy calculator · Risk/reward calculator