A Trading Plan Should Answer These 5 Questions Before You EnterGoldOANDA:XAUUSDGoldenPearl_tradA good trading plan does not need to be several pages long. Before you click Buy or Sell, it should help you answer five simple questions clearly. If even one of them is still vague, you may not have a real setup yet — you may only have an idea. 1. Why Am I Entering Here? Not because “price looks like it might go up” or “RSI looks good.” You need a specific reason: Trend + Key Zone + Entry Trigger. For example: the main trend is bullish, price pulls back into support, and a clear buying reaction appears. If you cannot explain your entry in one simple sentence, the setup may already be too complicated. 2. What Proves Me Wrong? This question is even more important than your profit target. Your Stop Loss should be placed where, if price reaches it, the original trade idea is no longer valid. Do not place your Stop simply because you want to lose less money. Define the invalidation level first, then adjust your position size accordingly. 3. How Much Am I Risking? A great-looking setup does not justify taking more risk. Before entering, you should know exactly: If I am wrong, how much of my account will I lose? If one losing trade makes you lose sleep, stare at the chart constantly, or feel tempted to move your Stop, your position size may be too large. 4. How Will I Exit If I’m Right? Many traders plan their entry carefully but have no clear plan for what to do once price moves in their favour. You should know in advance: Where is TP? Will I scale out? When will I move my Stop? What would make me exit early? Without an exit plan, a profitable trade can quickly turn into an emotional decision. 5. What Would Make Me Skip This Trade? This is one of the most overlooked parts of a trading plan. A good plan should not only tell you when to enter, but also when not to enter. For example: Price has moved too far from the planned entry. Risk/Reward is no longer attractive. Major news is about to be released. Market structure changes before the trigger appears. You are trying to recover the loss from your previous trade. Having a setup does not mean you have to take it. 30-Second Checklist Before Entry Why here? — Why am I entering? Where am I wrong? — Where is my invalidation? How much can I lose? — What is my risk? How do I exit? — What is my exit plan? What cancels the trade? — What would make me skip it? If you can answer all five before clicking the button, you are trading with a plan. If you only start finding the answers after you are already in the trade, then the “plan” is often just a way of justifying an emotional decision. A good trading plan will not make you win every trade. It will make sure you know exactly what you are doing — even when the trade loses. This content is for educational purposes only and does not constitute financial advice.