Building a Futures Trading Plan

Market, session, contract month, kill switch.

Advanced 5 min read Course 35 of 60

Course 35 of 60 in the futures hub. This one walks through the fields a futures trading plan needs, the markets to keep off it, and when a plan should be rewritten.

A plan you can read before the open

A trading plan is a page you read before every session and follow during it. If it's ten pages of goals and quotes, you won't read it, and if you don't read it, it isn't a plan. The useful ones are short, specific and a little boring.

Futures plans tend to fail in two places: they leave out which contract month you trade and which hours you trade it. Leave those out and the plan quietly allows everything. Spot currency plans have their own required lines, covered in the forex course.

1. The fields every plan needs

Start with the contract: the root symbol, like MES or CL, and nothing else. Then the month you trade and your rule for rolling. Then the session, such as regular U.S. hours only. Then risk per trade in dollars and the daily loss that ends the session. Finally, when you flatten: before the evening session, before a report, or both.

If any field is blank, that's where the trouble comes from. No session line means surprise overnight losses. No month line means holding the wrong contract into expiry or delivery. Check what each position ties up with the margin calculator so the plan's size fits the account.

A futures plan names product, session, month, and the off switch FieldExampleIf blankResultRootMES onlyhobbyrandom clicksSessionRTH onlyETH surprisegap P&LMonthfront / roll rulewrong objectdelivery weatherKill$X / daymoodthe usual hole

2. Markets you won't touch

A list of markets you don't trade is as useful as the list you do. Crude oil overnight, grains into a crop report, a second stock index when you already hold one: write them down while you're calm. Here's what a tight plan line can look like:

Plan line: MES only, regular hours only, $220 risk per trade, daily cap $440 (2 × $220), flat before the evening session. Break one line and the week is done.

Anything whose tick value you can't name from memory goes on the banned list by default. If you'd need to look up what one tick is worth, you're a spectator in that market, not a participant. Run the numbers for the markets you do trade with the risk calculator and keep the results on the page.

Forbidden list is a risk control — write it while you are calm CL overnight unless specialized Ags into WASDE limits exist Second index when ES factor is full duplicate beta Anything you cannot name the tick $ of you are a spectator

3. How often to review it

Trade the plan as written during the week and keep a journal of ticks and dollars for every trade. Once a week, read the journal and prune: drop a setup that keeps losing, tighten a rule you kept bending. That review is the only time the plan changes.

A monthly look at the bigger picture helps too: is the account growing, flat or shrinking, and is the market still a fit? Keep the review short and on the calendar. The free calculators help when you need to recheck sizes after an account change.

Weekly prune. Monthly rewrite trigger. Not a vibe Trade as written Journal ticks + $ Weekly prune Rewrite only on trigger

4. Your broker has rules too

Your futures broker's rules belong in the plan. Note its intraday and overnight margin, the time the intraday rate ends, and what it does when you're short on margin. Some firms liquidate positions with little warning. Learning that during a fast market is expensive.

Also note the report calendar for your markets and your roll dates. Those three things, house margin, reports and rolls, are what people most often leave out.

5. When to rewrite the plan

Rewrite on a trigger, never because yesterday hurt. Good triggers: the contract's hours or tick value changed, your account doubled or halved, or you broke the daily loss rule twice in a month. That last one means the plan isn't being followed, and a plan nobody follows has stopped being a plan.

Before rewriting a strategy, test the change. The backtesting lesson covers how to do that without fooling yourself with stitched charts and missing costs.

Rewrite on a trigger — not because yesterday hurt Triggers Product hours or tick changed.Account size doubled or halved.You broke the kill switch twice. Then the plan is fiction.

6. Plans that fail

The vision-board plan: goals, quotes and no numbers. The plan with no month or session. The plan that gets changed mid-session after a loss. The plan copied from someone with a different account size, schedule and temperament.

Keep yours specific to you and short enough to read in two minutes. Next comes the order flow and depth of market lesson, which looks at what the order book can and can't tell you.

A sample one-page plan

Here's the shape of one, with numbers you'd replace with your own. Market: MES, front month, roll when the next month becomes the busier one. Hours: 9:30 a.m. to 11:30 a.m. Eastern only. Risk: $220 a trade, set by a stop in ticks. Day ends at minus $440 or 11:30, whichever comes first.

Banned: trading the first minute after CPI or a Fed decision, holding into the evening session, adding to a loser. Broker notes: intraday margin cutoff time, liquidation policy. Review: Sunday evening, twenty minutes. That fits on one page with room to spare, and you can read it before every open.

What the plan has to say

  • Contract, month, session, risk per trade and daily cap, in numbers.
  • A banned list, written while you're calm.
  • Your broker's margin times and liquidation policy.
  • Change it only at a scheduled review, or on a real trigger.

If you can't read your plan in two minutes before the open, cut it until you can. Educational only. Not a recommendation to buy, sell, or hold any contract or pair.