Writing a One-Page Risk Plan You Can Follow on a Bad Day

A risk plan is written for the version of you who has just lost three trades in a row before lunch and wants the money back by the close. That trader won’t read a long document. One page will do, in dollars, with nothing left to interpret.

What goes on the page

Everything from the earlier lessons ends up here as a line with a number beside it.

Line	What it limits
Risk per trade	The most one trade can lose at its stop
Total open risk	The most all open trades can lose if every stop is hit together
Daily loss limit	The loss at which you stop trading for the day
Drawdown steps	The balances, from the peak, at which you cut size and at which you stop
Leverage cap	How much of the account can sit in positions, and whether margin is allowed
Earnings and major releases	What you do with open positions and new entries around reports and scheduled data

Each line gets a percentage. Beside it goes the dollar figure that percentage comes to today, because dollars are what you can check against the screen in the second before you click, and a percentage asks you to do arithmetic at exactly the moment you are least inclined to.

A worked plan on $30,000

Here is a hypothetical plan.

At half size the per-trade risk becomes 0.5% of the current balance. At $27,600 that is $138.

The last drawdown line is the one that keeps the account worth rebuilding. A 15% fall needs a 17.6% gain to undo, a long way back though a recoverable one, and stopping at $25,500 to review keeps the loss from running on into the range where each further point lost adds more than a point to the climb back.

The open-risk line matters more than it looks. Five trades at $300 each is $1,500 of risk, and a sixth trade has to wait until one of the others closes or its stop moves up far enough to cut what it can lose, which the answer on adding up the risk on all your open trades works through.

The daily limit stops a bad morning. Two full losses and the platform closes for the day.

Leverage and event rules

A leverage cap on the same account might allow no more than 1.5 times equity in positions, which is $45,000, and no margin on any single stock held through an earnings report. The event rules could read: no new full-size entries in the session before a company reports, and no new trades in the minutes around a scheduled release such as the jobs report or a Federal Reserve rate decision.

The earnings rule exists because a stop cannot act on a gap. A $5,000 position that opens 12% lower after a report loses $600 at the first print, the whole daily limit in one move, and no amount of care with the stop placement changes that, since the stock never traded at the stop price at all.

These figures are examples. Yours depend on how you trade.

Where it lives

Keep the plan where you trade. Print it and tape it beside the screen, or pin it as the first tab the platform opens, somewhere you will see it before the order ticket and long before the fill. A copy in the journal helps too, with a line at the end of each session to note whether every limit held.

Out of sight, it stops existing.

When it can change

Change the plan only when markets are closed. The reason is practical: a rule edited during a losing session gets edited in the direction of the loss, a daily limit nudged from $600 to $900 because the day is going badly, a stop widened because the trade “needs room”, each change small and each one made by the person the plan was written to restrain. Evenings and weekends are when you can open the journal, see whether a limit is too tight or too loose, and change it on evidence.

Testing the page

A plan earns its place on the worst day. Read each line and ask whether a trader who is angry and behind could argue around it. If so, the wording is loose. “Trade smaller when things go badly” invites a debate. “At $27,600, risk $138 a trade” ends one.

The position size calculator turns the per-trade line into a share count for each new trade. To find the gaps in a written plan before the market does, try the poke a hole in the plan quiz, and the answer on when to walk away after a drawdown helps you set the last line on the page.

The page gets written once, on a calm evening. After that the only job is to follow it, including on the days you would prefer it had never been written.