What Is a Strategy Playbook?
A strategy playbook is a documented set of rules that defines exactly when you will and won't enter a trade. Think of it as your trading constitution — a set of rules you commit to following before emotion enters the picture.
Why Vague Rules Don't Work
"I trade breakouts" is not a strategy. "I trade false breakouts" is not a strategy either. A strategy has to be specific enough that two different traders reading it would make the same entry decision on the same chart.
Bad rule: "Enter when price breaks above resistance."
Good rule: "Enter a long position when price closes above the 4H resistance level with a candle body larger than the 14-period ATR, after at least 3 touches of that resistance, with RSI(14) between 50 and 70."
The 5-Part Playbook Template
Each strategy in your playbook should have these five sections:
1. Market Conditions
When does this strategy work? "Trending markets only, not ranging." "During London session, not Asian session." Define the macro context where your edge is valid.
2. Entry Criteria
What specific conditions must be present before you enter? List them as a checklist. Price action criteria, indicator values, timeframe alignment. All boxes must be checked.
3. Stop Loss Rules
Where does your stop go? Is it a fixed number of pips, a multiple of ATR, or a structural level (below swing low)? This must be decided before you enter, not after.
4. Take Profit Rules
How do you exit winners? At a fixed R-multiple (2R, 3R)? At the next resistance level? Do you scale out? Define this in advance so you're not moving your target when the trade goes in your favour.
5. Trade Management Rules
What do you do when the trade is running? Do you trail your stop? Move to breakeven after 1R? Hold until target? Every possible scenario should have a predetermined answer.