The Investor Diary Entry #90: November 9, 2025
I am documenting my ongoing effort to understand what constitutes a solid forex trading plan. This is a core component of my journey, and my perspective is that of a learner who is testing and evaluating different methodologies. I am not providing advice, but rather chronicling my process of education and experimentation. A trading plan is often described as a trader’s blueprint, but I am seeking to move beyond clichés and identify the specific, functional characteristics that make a plan robust and, ultimately, something I can rely on for my own trading.
TL;DR: My Current Understanding of a Solid Trading Plan
Based on my research and testing, I am currently operating under the premise that a solid forex trading plan must be mechanical rather than subjective, operate on a time frame suitable for my capital and schedule, and produce an acceptable win-loss ratio when combined with my money management system. I have been testing the Smart Money Concept (SMC) for its mechanical nature but have found its raw win-loss ratio unsatisfactory. My current focus is on integrating additional filters, such as top-down analysis and stochastic oscillators, to refine the SMC approach into a plan I can use with confidence. The entire process is founded on continuous education, as I detailed in my previous discussion on how to become a successful Forex Trader.
The Pursuit of a Mechanical System
The first characteristic I am prioritizing in my search for a solid trading plan is that it must be mechanical. My previous attempts with classical tools like support & resistance and trend lines felt too subjective. I found it difficult to define precise, non-negotiable rules for trade entry and exit. The SMC methodology initially appealed to me because it offered a more structured framework. The process of identifying a trading range, pinpointing a Point of Interest (POI), and placing an order block with a predetermined stop loss and take profit is inherently mechanical.
I documented the initial stages of this mechanical approach in my post about what is a forex trading plan. The theory is straightforward: if the price reacts at the POI, the trade is triggered and managed according to the plan. However, I learned that a mechanical process alone is insufficient. The system I was testing resulted in a low win rate, despite occasionally high risk-to-reward ratios. A plan can be perfectly mechanical and still be unprofitable, which led me to seek additional layers of confirmation.
Selecting a Suitable Time Frame
A solid trading plan must also account for the practicalities of trading, which for me means selecting a suitable time frame. I have settled on analyzing the daily and one-hour charts. The daily chart provides a broader market context and is less demanding of my time, but it generates fewer trading opportunities, which can be a constraint given my testing capital. The one-hour chart offers more frequent signals but operates at a pace that requires more active monitoring.
This selection is a personal compromise. A faster time frame, such as the fifteen-minute chart, is too rapid for my schedule and would likely cause me to miss many setups. A slower time frame, like the weekly, is too infrequent. The balance between the daily and one-hour charts allows me to conduct a top-down analysis without being overwhelmed, ensuring the plan is executable within my lifestyle.
The Critical Balance of Win-Loss Ratio
The characteristic that has proven most challenging is achieving an acceptable win-loss ratio. A plan can be mechanical and fit one’s schedule, but if it does not produce a favorable statistical outcome over time, it is not solid. My testing with the pure SMC method revealed this weakness. The win rate was simply too low to be sustainable, even with the potential for high reward-to-risk trades.
This realization forced me back to the foundation of all my efforts: education. I am now studying how to integrate other analytical schools of thought to filter my SMC trades. I am experimenting with stochastic oscillators to confirm trend direction across time frames. I am also considering simple moving averages (SMAs) for additional context. The goal is not to abandon the mechanical SMC base but to enhance it with educated filters to improve the probability of each trade.
The Role of Continuous Education
Every step of this process is underpinned by education. I cannot overstate its importance. My understanding of classical charting, SMC, and now oscillators has come from dedicated study through books, online courses, and webinars. I am not an expert; I am a student of the markets. This journey has taught me that a solid plan is not a static document but an evolving one, refined through continuous learning and testing. For anyone beginning this path, I believe a critical first step is understanding how to find the best Forex Trading courses online to build a strong knowledge base.
Frequently Asked Questions
What is the difference between a trading plan and a money management system?
In my process, I distinguish between the two. A trading plan defines my market analysis, entry criteria, and exit rules. A money management system dictates how much capital I risk on each trade, my position sizing, and my overall risk tolerance. I developed my money management plan first, as I believe survival in the markets is paramount.
Why is a mechanical plan better than a discretionary one?
I am not asserting it is universally better. For me, however, a mechanical plan reduces emotional decision-making. It provides clear, testable rules. A discretionary approach, based on subjective interpretation, introduced too much uncertainty and inconsistency into my own trading.
How long does it take to develop a solid trading plan?
I cannot provide a definitive timeline, as my own journey is ongoing. It is a process of testing, learning, and adapting. I have not yet reached a point where I am fully satisfied with my plan, and I accept that this development may take a significant amount of time and demo trading.
Conclusion
My search for a solid forex trading plan continues. I am currently focused on refining a mechanical system based on SMC by incorporating multi-timeframe analysis and stochastic confirmations to achieve a better win-loss ratio. This plan must align with my chosen time frames and work in harmony with my pre-established money management rules. I document this not as a guide, but as a record of my own testing and learning. I am still in the phase of education and experimentation, and I look forward to reviewing this journal in the future to measure my progress.
The Investor
Sunday 9 November 2025
About The Author
I started to look into individual stocks in January 2022. I created this diary initially for myself to track my investing progress, and second, as a place where I can share my ideas publicly, not only on stock investment, but on any venture that I start learning, such as Forex Trading, Blogging, or any other future venture that I might think of trying out.
By repeating things I learn to myself and trying to explain it to others, I help myself better understand what I am learning. Additionally, hoping that others will share their ideas and learn from each other, and lastly as an online business where some links that I share are affiliate links, and if anybody bought anything by clicking tihose links, I will get a commission based on that successful sale, which of course will not affect the price that you are buying the product or service at.
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This blog is also part of my blogging learning project. I’m using a platform to learn this part. If you are interested in it, it is called Wealthy Affiliate.
Furthermore, this site is in no way or form giving any financial or investing advice, nor is it encouraging or discouraging people to buy or sell any financial instrument. This is a personal diary in which I track my own progress and share it for informational, educational, and entertainment purposes.