Your written swing-trading playbook
Combine scanning, setups, sizing, exits, portfolio limits, routines and review rules into one written swing-trading playbook with exact numbers.
What you will learn
- The sections a complete swing-trading playbook needs and what each must contain
- How to turn account size into exact risk, heat and drawdown numbers
- How to write a weekly and daily routine that fits your available time
- A protocol for changing rules without losing the value of your records
Explanation
A general one-page trading plan and a personal risk policy are covered in the introductory trading course and in the course Risk Management. A playbook is narrower and more detailed: it describes only how you swing trade, with each setup written as an if-then rule that another person could follow without asking you anything.
Sections of the playbook
- Scope: markets, instruments (for example shares only, no leverage), long only or long and short, account used.
- Universe and filters: the liquidity and relative-strength filters from the scanning lesson, with exact thresholds.
- Sector focus: how often you rank sectors and which ranks you scan.
- Setups: for each setup, the conditions, the entry trigger, the initial stop, the exit plan and the time stop.
- Risk rules: risk per trade, heat cap, sector cap, maximum positions, rules for earnings and other events, and how you treat gaps.
- Routine: what you do at the weekend, after each close and before each entry.
- Review: journal fields, review dates and the metrics you check.
- Drawdown rules: when you reduce size and when you pause.
- Change protocol: how and when a rule may change.
Drawdown rules
A drawdown is the fall of the account from its highest value (the peak). Write two levels: a level where you halve the risk per trade and a level where you stop opening new trades and review the journal. Measure from the peak of the account, not from the starting balance. Return to normal size only by a written rule, for example after the account recovers half of the drawdown.
Change protocol
- Change rules only on a fixed review date, never during a trade.
- Change one variable at a time and write the date of the change.
- Base a change on a sample of trades (for example at least 30 for that setup), or test it first on paper.
- Keep old versions of the playbook so that you can compare periods.
Time budget
Write how much time you have and fit the rules to it. If you can spend 30 minutes after work, choose daily-close entries and stops that do not need watching during the day. A playbook that needs more time than you have will be broken.
Worked example
Hypothetical example: a filled-in risk section for an account of €25,000 trading shares without leverage. Fees, spreads and taxes are not included in the numbers.
| Rule | Setting | Euro value |
|---|---|---|
| Risk per trade | 0.75% of current account | €187.50 |
| Heat cap | 4% of account | €1,000 |
| Maximum positions at full risk | €1,000 ÷ €187.50 = 5.33 | 5 positions |
| Sector cap | 2 trades or 1.5% of account | €375 |
| Halve size | account 5% below peak | below €23,750 |
| Pause new trades | account 8% below peak | below €23,000 |
Steps: 0.75% × €25,000 = €187.50; 4% × €25,000 = €1,000; €1,000 ÷ €187.50 = 5.33, rounded down to 5; 1.5% × €25,000 = €375 (exactly two trades at €187.50); 95% × €25,000 = €23,750; 92% × €25,000 = €23,000.
One setup written as an if-then rule: "If the sector ranks in the top three, the share's weekly close is above its rising 10-week average, and the daily price pulls back to the 20-day average and then closes above the prior day's high, buy at the next open. Initial stop below the pullback low. Sell half at +2R; trail the rest with a 2.5 × ATR chandelier stop. Exit after 10 sessions if +1R is not reached. No entry within the earnings window defined in the event rule."
Weekly routine (Saturday, 60 minutes): update sector ranking, review weekly charts, build a watch list of at most 10 names. Daily routine (after the close, 30 minutes): update stops, check heat and caps, set alerts, record exits.
Common mistake
Practice activity
On paper: use the same settings as the worked example for an account of €40,000. Calculate the risk per trade, the heat cap, the maximum number of positions at full risk, the halve-size level, the pause level, and the risk per trade after halving. Then rewrite the vague rule "exit when the trade stops working" as an exact rule.
Show solution
Risk per trade = 0.75% × €40,000 = €300. Heat cap = 4% × €40,000 = €1,600.
Maximum positions = €1,600 ÷ €300 = 5.33, rounded down to 5.
Halve size below 95% × €40,000 = €38,000. Pause below 92% × €40,000 = €36,800 (if €40,000 is the peak).
Risk after halving: €300 ÷ 2 = €150 per trade (or 0.375% of the current account).
Example exact rule: "Exit at the next open if the trade has not reached +1R after 10 sessions, or if the daily close is below the 20-day exponential moving average."
Limitations: the euro levels assume the peak equals €40,000; update them when the account makes a new peak.
Key takeaways
- A playbook writes every setup as an if-then rule with exact entry, stop and exit.
- Convert percentages into euro amounts for risk, heat, sector caps and drawdown levels.
- Fit routines to your real time budget so that the rules can be followed.
- Change rules only on review dates, one variable at a time, based on enough trades.
Next step
Continue with the course Systematic Trading & Backtesting, where you will turn playbook rules into precise systems and test them on historical data.
Self-check
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