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The trading plan

Don't enter a trade until you know four answers: where's the entry, where's the stop, what's the size and where's the target. Here is each point and the Where–What–When method that turns chaos into a system.

Way to Lambo · 5 min read · level: beginner

Contents
  1. The four parts of the plan
  2. The Where–What–When method
  3. Write the plan down
  4. Common mistakes

In short

1. Entry
What triggers your entry and whether it fits your system.
2. Stop
Where the entry logic stops working.
3. Size
What position size keeps the loss within plan.
4. Target
Where price may go: nearby levels and risk-to-reward.

The four parts of the plan

  • Entry point. What exactly has to happen for you to enter? For example, a retest of a broken trendline and local support. Is this entry from your system, or improvisation?
  • Stop. At what point does the entry logic become invalid? If price returns behind the trendline and breaks the low, the scenario is broken — that's where the stop goes.
  • Position size. How much to enter so the stop costs no more than planned. Formula: (risk / stop) × account.
  • Target. Nobody knows where price will go. Use the nearest resistance levels and your risk-to-reward ratio as a guide.
A trade plan: entry on a trendline retest, stop below the low, three targetstarget 1target 2target 3retest entrystop
Entry on a retest of the broken line, stop below the low, three targets at the nearest levels. Illustrative data.

The Where–What–When method

A handy way to build your entry system:

01
Where
The zone of interest where you're willing to trade at all: large order density, a previous high or low, a round number, a pattern.
02
What
What you want to see in that zone: a false breakout, a liquidity sweep, a stop hunt, an order wall being eaten.
03
When
The exact moment of entry: a pullback below the level, a candlestick pattern, an order wall holding, a candle closing beyond the level.

If any answer is missing, there's no trade. You can't open a position in a random spot.

Write the plan down

Write the plan before you enter: entry, stop, size, targets, the reason for the trade. After it closes, the result and what you did off-plan. After a month, the journal shows which setups make money and which only cost nerves.

A trade without a plan is a bet. Even if it closes in profit, you learned nothing you can repeat.

Common mistakes

Making up the plan mid-trade

Once a position is open, emotions make the decisions. The plan is made before entry.

Skipping the size question

A good entry with the wrong size still destroys an account.

Moving the target on the fly

Pushing the take-profit further because "it's going well" is a common way to give back all the profit.

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The waytolambo bot sends ready-made signals: entry zone, stop and five take-profits. All you decide is whether to take the trade.

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Signals are for information only and are not investment advice.

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