Trading playbook: building one from your own base rates

Start in plain English

Many traders keep a list of setups they like. A trading playbook is something narrower: a few written plans, each with the evidence for it from your own log, and a schedule for checking that evidence again. For a small-cap scalper whose setups can work for a month and fade the next, a playbook is how you decide what to keep trading without relying on the last few results.

The core idea: a playbook entry is a plan plus a measured base rate, with a review date and a retirement rule written before the review. The plan says what conditions, trigger, invalidation and exits define the setup (A trading plan as a hypothesis). The base rate says how that plan has done in your log, after costs, with the number of trades and the period. The review rule says in advance what result keeps it, puts it on watch or retires it.

Two paths from the same start

All playbook entries, counts and results in this section are Illustrative.

The review rule, written in the playbook before the quarter started. Review each entry at the end of every quarter, using its most recent 100 trades in R after costs:

• Keep if average net R is above zero and plan adherence is at least 80%.
• Watch (half size, keep counting) if average net R is between −0.05R and zero, or if fewer than 30 new trades were logged this quarter.
• Retire if average net R is below −0.05R. A retired entry can return only as a new version with a new definition.

Risk $50 per trade throughout.

Three entries, one rule, three decisions, none of them made by looking at last week's P&L. Path C's quarter was the best per trade and still changed nothing, because nine trades say little. The rest of this lesson gives the entry template, the review cadence and the retirement rules in detail.

The playbook entry template

Each entry fits on one page. A field you cannot fill is a finding in itself.

Two rules keep the template honest. First, only trades that met the written definition count toward its base rate; tag them before entry. Second, every change creates a new version, and the new version starts its own count. Otherwise a definition drifts toward whatever worked last month.

Review cadence

A review needs enough new trades to say something, and a calendar date so it happens. Combine both: review at the end of each quarter or after every 50 new trades for that entry, whichever comes first, and only make a keep or retire decision when at least 30 new trades exist.

At each review, write down, per entry:

1. New trades since the last review, average net R, and its rough interval.
2. The most recent 100 trades, average net R.
3. Plan adherence: share of trades marked within plan.
4. Any change in costs per trade.
5. The regime label for the period.
6. The decision under the pre-written rule, and the date.

Between reviews, do not edit entries because of a few results. A losing week is part of the base rate, not a reason to rewrite it.

Retirement rules

Retiring a setup is as much a part of a playbook as adding one. Rules that work in practice share three features:

• Written before the review, as in the paths above.
• Based on a window, such as the last 100 trades, not on the last few.
• With a watch stage, so a weak quarter leads to smaller size and more counting rather than an all-or-nothing decision.

A retired entry stays in the playbook, marked retired, with its numbers. If conditions change, a new version can start a new count. Deleting it would lose the evidence of what did not work.

Observe vs. infer

A trader's notes before a review: "First pullback is dead. Three losses in a row last Friday."

The pre-written rule makes the decision without needing to settle which story is true.

What shifts the odds

These are hypotheses to record, not findings:

• Regime at the time the base rate was measured. An entry built in a busy month may look weaker in a quiet one.
• Definition drift. If the definition was loosened mid-quarter, the base rate mixes two setups.
• Cost changes. A fee plan change or a move to smaller-target trades shifts net R without any change in the setup.
• Trade count per entry. Entries with few trades produce wide intervals; their status changes should be rarer.
• Plan adherence. An entry's numbers describe the setup only to the extent its trades followed the plan.

Cost of being wrong

Using the three entries at $50 risk per trade (Illustrative):

How many trades before this means anything

Per entry, 100 trades with a per-trade standard deviation of 1.2R give a rough 95% range of about ±0.24R around the average (Illustrative, normal approximation). That is wide compared with the differences that matter for keep and retire. A playbook therefore needs few entries, many trades per entry, and rules that accept uncertainty rather than wait for proof. How many trades before your numbers mean anything explains the interval; R multiple explains why the base rates are in R.

What this lesson does not claim

• It does not claim any of the example setups work or fail. All entries and numbers are Illustrative.
• A retirement rule is a risk decision under uncertainty, not proof that a setup stopped working.
• A measured base rate describes your past trades; it does not indicate future results.
• A playbook does not replace a daily loss limit or position sizing.

Go deeper

• FennEdge first.
  • If you trade live, the Trading Journal syncs real fills from supported brokers. In its Journal Review view (Pro or Max, as of 2026-10-05) you can add personal tags (one per playbook entry and version) and mark each trade "Within plan" or "Outside plan", which gives you the adherence field for real trades. Compute R and base rates per tag in your own sheet; as of 2026-10-05 the Journal computes its statistics from dollar P&L and has no planned-stop field. The Journal holds broker-synced trades only, not practice or simulated entries.
  • Desk holds day notes and, on Plus and above, ongoing notes (saved to your account when signed in; as of 2026-10-05), a practical place for the one-page entries.
• Sharing a playbook without private data. Share definitions, conditions and base rates in R with n and period. Leave out dollar amounts, account details and screenshots that show tickers with dates if you do not want them traced to you.
• Implementation intentions. If-then rules, studied by Gollwitzer (1999), are the form the after-loss and review rules take.
• Capstone. A 100-trade edge review is the first full review of one playbook entry; Reviewing scalps and Overtrading supply the per-tag and per-bucket numbers.

Exercises

Five exercises follow this lesson: three concept checks (what makes an entry testable; when a definition change needs a new version; deciding on a small sample) and two practice tasks. Exercises, answers and progress are available after signing in.

Practice task 1: write two playbook entries. From your practice log (download the practice log (CSV), with a column guide), pick the two setups with the most logged trades and fill in every field of the template. Use only trades that met the written definition, and write n, period and as-of next to each base rate. Write the keep, watch and retire rule before you look at any new results.

Practice task 2: run a scheduled review. Log at least 30 more sim or replay trades for each entry under its fixed definition, then run the review steps above and record the decision the rule gives. Keep the playbook and the practice log separate from the Trading Journal, which holds only real broker-synced trades.

Primary sources

• Gollwitzer, P. M. (1999). Implementation Intentions: Strong Effects of Simple Plans. American Psychologist 54(7).

Sources checked 2026-10-05. All playbook entries, trade counts, base rates and costs in this lesson are fictional and Illustrative. This lesson is education, not a recommendation to buy or sell any security. Past patterns do not indicate future results.