Trade planning guide
The five-step preparation process we teach in every Reason Flowhub session. Use this as a reference before your next trade or before attending a workshop.
Identify the setup on the chart
Begin with a clear technical reason for interest: a break of structure, a retest of support, a pattern completion, or a confluence of levels. Write one sentence describing what you see. If you cannot articulate the setup in plain language, it is not ready for a plan.
Mark the relevant levels on your chart — support, resistance, trend lines, or pattern boundaries. These marks become the foundation for your stop and target decisions in the steps that follow.
Place your stop at invalidation
Your stop-loss belongs at the price level where your trade thesis is proven wrong — typically below the swing low for a long, above the swing high for a short. Avoid placing stops at round numbers or fixed pip distances that ignore chart structure.
Measure the distance from your intended entry to the stop in pips or points. This distance is your risk per unit and feeds directly into position sizing.
Define a realistic target zone
Map where price is likely to encounter the next meaningful resistance (for longs) or support (for shorts). Use prior swing levels, measured move projections, or Fibonacci extensions — but only levels visible on your chart, not wishful prices.
Calculate the reward-to-risk ratio: divide the distance to your target by the distance to your stop. If the ratio falls below your minimum threshold (we teach 1:2), the trade does not qualify — regardless of how compelling the chart looks.
Size the position from your risk budget
Decide what percentage of your account you are willing to lose if the stop is hit — commonly 0.5% to 2%. Multiply your account balance by that percentage to get your monetary risk. Divide monetary risk by the per-unit risk (entry to stop distance) to calculate position size.
Write the final lot size or share quantity on your plan. Do not adjust it after entry based on confidence or recent wins.
Complete the plan and set your entry trigger
Before opening your trading platform, your plan should contain: the setup description, entry trigger (a specific price or candle close condition), stop level, target level, position size, and calculated R:R. Only after all fields are filled do you watch for the entry trigger.
If the trigger never fires, you have lost nothing. If it fires and the trade moves against you, your loss is contained to the amount you planned. This is the discipline the workshop instils.
Get the template and guided practice
This guide summarises the process, but the workshop gives you hands-on practice with your own charts, instructor feedback, and a reusable trade plan template you can keep at your desk.
Attendees also receive a position size calculator spreadsheet and two weeks of follow-up email support for questions that arise after the session.
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