Trading plan
A trading plan is a written set of rules for your own trading: what you trade, when you enter and exit, how much you risk, and when you stop — all decided before the market is open.
A complete plan covers the instruments and session you trade, the setup (what must be true before you act), the entry trigger, where the stop and target go, risk per trade, a hard daily stop, and a review routine built on a trading journal. The test of a plan is transferability: another trader should be able to execute it from the page. If it cannot be written that precisely, it is a mood, not a plan. Backtesting is how a plan earns its numbers before real money leans on them.
The plan lives in the psychology category because its job is to move decisions out of the moment. Improvising with money on the line and P&L flashing is where overtrading and revenge trading come from; a written plan converts those moments into a binary — followed the rule or broke it — that the journal makes visible. The plan's expectancy only exists if the plan is actually executed.
Example
A plan for a $100,000 account might read: risk 0.5% ($500) per trade; maximum two trades per day; hard stop for the day at −1% (−$1,000); London morning only; EURUSD and GBPUSD only; every trade journaled the same day. Nothing exotic — the value is that every number was chosen calmly, in advance.
In a prop-firm challenge
A challenge is trading under someone else's plan: daily loss limit, max drawdown, minimum days. The practical move is to set your own limits tighter than the firm's — a personal −$1,000 day against a $5,000 limit means a bad day ends by choice, with the account intact, long before a rule can end it for you. How the two rule sets interact is laid out in what is a prop-firm challenge.