The pre-entry plan that locks exits and size

The plan comes before the order

A complete plan is written before capital is committed. It must specify what and when to trade, why the setup has potential, the adverse exit, the favorable exit, and how much to risk.

If those answers are missing, the plan is incomplete and the trade is not ready to enter. Working the full plan before entry functions as a stepwise readiness check, equalizes comparison across setups, and reduces surprise because responses are already decided.

Readiness is a written sequence

A checklist process is a written readiness sequence that must answer instrument and timing, thesis, adverse exit, favorable exit, and size before an order may be placed. Those five answers are the gate on the order, not a note to finish after the fill.

An entry only creates potential. A result requires a planned exit. The chosen entry method should be applied consistently or withdrawn for repair rather than patched while a position is open.

Freeze the answers before the position exists

A trading psychology process freezes those answers before the position exists so ego, fear, greed, and hope cannot rewrite exits once the trade is live. Once involved, the wish for the trade to work skews judgment.

A trade without a clear reason should be skipped. If later information kills that reason, exit at once instead of waiting for price to turn.

Plan the exits while judgment is still clear

Loss-exit conditions must be set before entry because an open position biases judgment. A trailing exit should reflect volatility rather than an arbitrary fixed percentage, and the warning must be acted on as soon as it appears.

Favorable exits must be planned in advance as well. Reaching a stated technical or fundamental objective is itself a reason to leave, because greed after a win can be as distorting as fear after a loss.

Treat size as a survival constraint

Position size is first a survival constraint. Long losing streaks are treated as realistic, and a fixed fraction can be derived from streak length and the remaining capital still considered tolerable.

Judge the system by the written rules

A mechanical trading system is a consistently applied set of entry, exit, and abstention rules judged by adherence and survival sizing rather than by whether any single trade made money. A good trade is one that follows the written rules, not merely one that made money.

Idle capital is moved when the position is failing to go right, and the working aim is to limit losses and take small steady gains. Recording the entire plan and later impressions in a journal reduces omitted rules, keeps exits in view, and is a more reliable review tool than memory.