In this lesson
Pilots do not trust their memory before take-off. They read a checklist, every time, even after thousands of flights. Not because they forget, but because the one time they skip a step is the one time it matters.
Trading has the same kind of moment. The rules you learned in this course are easy to agree with on a quiet Sunday. They are hard to follow at the end of a losing day, with a setup on the screen that looks like the one that gets it all back. A written plan is what you follow in that moment instead of your mood.
This last lesson puts the whole course on one page.
The eight lines of a risk plan
A complete risk plan answers eight questions. Each one comes from a lesson in this course.
- Risk per trade. What percentage of the account do I lose if a stop is hit? (Lesson 2)
- Lot size. How do I turn that into a position, every time? (Lesson 3)
- Stop placement. Where does the stop go, and how do I check it against noise? (Lesson 4)
- Targets. What risk-reward do I aim for, and what win rate does that need? (Lesson 5)
- Open risk. What is the most I can have at risk at once, in total and per currency? (Lesson 8)
- Daily and weekly limits. When do I stop for the day, and for the week? (Lesson 7)
- Drawdown rule. What do I change when the account is down from its high? (Lessons 6 and 7)
- Review. When do I judge whether the plan and the strategy work? (Lesson 6)
The answers do not have to be clever. They have to be written down before you need them, and they have to be numbers, not intentions. "Be careful after losses" is an intention. "Stop after 3 losses" is a rule.
Example 1: a personal account
Here is a complete plan for a $10,000 personal account, trading a strategy that wins about half of its trades.
| Line | My rule |
|---|---|
| 1. Risk per trade | 1% = $100 |
| 2. Lot size | Risk ÷ what 1.00 lot loses at the stop, rounded down to 0.01 |
| 3. Stop | Beyond the price that proves the idea wrong, at least 1 ATR(14) away |
| 4. Target | At least 1.5R; track the real win rate |
| 5. Open risk | At most $300 in total, $200 per currency |
| 6. Limits | Stop the day after a $300 loss (3 losses), the week after $600 (6 losses) |
| 7. Drawdown | At $1,000 below the high, risk $50 per trade until the high is back |
| 8. Review | Every 100 trades or on the 1st of each month |
A few notes on the choices:
- Risk of $100 per trade (1%). A 10-loss streak, which lesson 2 showed this kind of strategy will meet, costs under 10%.
- Open risk of $300, and $200 per currency. Three trades at once at most, and never more than two on the same side of one currency.
- Daily limit of $300. That is 3 full losses. After the third, the platform is closed for the day.
- Drawdown rule at $1,000. If the account falls 10% below its high, risk drops to $50 per trade until the high is back.
Example 2: a prop firm challenge
The second plan is for a $100,000 FTMO 2-Step challenge, with the firm's 5% daily limit ($5,000) and 10% maximum loss ($10,000) from lesson 7.
| Line | My rule |
|---|---|
| 1. Risk per trade | 0.5% = $500 |
| 2. Lot size | Risk ÷ what 1.00 lot loses at the stop, rounded down to 0.01 |
| 3. Stop | Beyond the price that proves the idea wrong; extra room for the spread on sells |
| 4. Target | At least 1.5R |
| 5. Open risk | At most $1,500 in total, $1,000 per currency |
| 6. Limits | My own daily stop after a $2,000 loss (4 losses). The firm's limit is $5,000, open trades included |
| 7. Drawdown | At $5,000 below the start (half the max loss), risk $250 per trade |
| 8. Review | After each phase, and every 100 trades |
FTMO 2-Step limits: 5% daily ($5,000) and 10% max loss ($10,000), from FTMO's rules as read 6 October 2026.
The firm's limits are the outer wall. The plan sits well inside them:
- Risk of $500 per trade (0.5%) gives room for 10 full losses before the daily limit, and twice that before the max loss.
- A personal daily stop of $2,000, well before the firm's $5,000, so one bad day never comes close to the line, even if a loss is bigger than planned.
- Open risk capped at $1,500 in total, so all stops being hit at once is a bad hour, not a failed challenge.
- At a $5,000 drawdown, risk halves to $250, because the room left to the max loss is now half of what it was.
The pre-trade checklist
The plan sets the numbers. The checklist makes sure you use them, in the ten seconds before every trade.
Before every trade
- My stop is where the idea is wrong, and it is outside normal noise.
- I calculated the lot size from my risk and this stop, and rounded down.
- If this stop is hit, I lose no more than my risk per trade.
- With this trade, my total open risk and my risk per currency stay under my caps.
- I am not over my daily or weekly limit, and I am not trading to win back a loss.
- I know what I will do if price reaches the target, and if it reaches the stop.
If any line is a no, the trade waits. That is the whole system. It is simple on purpose, because the moments when you need it are the moments when you can least handle anything complicated.
Keep the plan alive
A plan you wrote once and never read is a decoration. Three habits keep it working:
- Put it where you trade. Print it and tape it to the screen, or keep it open next to MT5.
- Review it on a schedule, not after a bad day. Every 100 trades, or once a month, compare your real numbers with the plan. Change the plan then, calmly, not in the middle of a streak.
- Let software enforce the parts you break. You probably know your weak line already. For some traders it is the daily limit, for others the size after a loss. Put a machine in charge of that line.
Get the free checklist
We made both pages of this lesson into a printable PDF: a blank risk plan with the eight lines to fill in, and the pre-trade checklist. Sign in with Google to download it.
Free PDF · 2 pages
Your risk plan and pre-trade checklist
A blank risk plan with the eight lines to fill in, and the six-line checklist from this lesson, ready to print.
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Key takeaways
- A risk plan answers eight questions with numbers: risk per trade, lot size, stop, target, open risk, daily and weekly limits, a drawdown rule and a review date.
- Write it before you need it. Rules are easy to agree with when calm and hard to follow after losses.
- At a prop firm, the firm's limits are the outer wall. Put your own limits well inside them, such as a $2,000 daily stop under a $5,000 limit.
- Use a short checklist before every trade, and let the trade wait if any line is a no.
- Review the plan every 100 trades or once a month, never in the middle of a streak.
Questions
What should a trading risk plan include?
Eight things: risk per trade, how you size positions, where stops go, your targets, a cap on open risk in total and per currency, daily and weekly loss limits, a drawdown rule, and a review schedule. Each one should be a number, such as $100 per trade on a $10,000 account, not an intention.
What is a good risk plan for a prop firm challenge?
Keep your own limits well inside the firm's. On a $100,000 FTMO 2-Step challenge, risking $500 per trade gives room for 10 losses before the $5,000 daily limit, and a personal daily stop of $2,000 keeps one bad day far from the line.
What should I check before every trade?
That the stop is at the price where your idea is wrong, that the lot size comes from your risk and that stop, that total open risk and risk per currency stay under your caps, and that you are inside your daily and weekly limits and not trading to win back a loss.
How often should I change my risk plan?
On a schedule, every 100 trades or once a month, after comparing your real results with the plan. Avoid changing it during a losing streak, when every rule looks like the problem.
Is the risk plan checklist free?
Yes. The printable PDF with the blank plan and the pre-trade checklist is free. You sign in with Google to download it.
Risk management and position size
Educational content, not financial advice. Trading forex and CFDs carries a high risk of losing money. Examples use round numbers to show the method; check your own broker's contract specifications and your firm's rules.