Capstone: Build and Test Your Own Crypto Trading Plan

A trading plan is a written rulebook that states what you trade, when you enter and exit, how much you risk, how you execute and how you review results. In this capstone you will write your own plan using everything from the course, then test it in stages: a backtest, an out-of-sample check, forward paper trading and finally small live trading, with clear rules for when to pause, change or retire it. A plan you can follow on your worst day is worth more than a clever idea you cannot.

Part 1: Goals and limits

Start with your situation, not with charts:

• Capital: how much is in the trading account, and what share of your total savings is it?
• Time: can you check markets once a day, or several times? Be honest; a plan that needs four hours a day fails in exam week or a busy month.
• Rules where you live: which exchanges and products are legally available to you, and how trades are taxed. Rules change, so check them again before you start (see How to Buy Crypto and Crypto Taxes and Record Keeping).
• Goal: realistic and process-based, such as "follow the plan on 100% of trades for six months", not "double my money".

Part 2: The template

Copy this into a document and fill in every line:

Section	Your rule
Market and products	Spot only, or spot plus futures at a maximum leverage of...
Universe	Which coins, chosen how, refreshed when
Timeframe and decision time	e.g. daily candles, decisions after 00:00 UTC
Market filter	When the plan is allowed to take new trades
Entry rule	Exact trigger and order type
Initial stop	Exact level and how it is calculated
Exit rule	Target, trailing stop or time stop
Risk per trade	% of current equity
Position sizing formula	(equity x risk %) / (stop distance + costs)
Maximum open risk	Total and per correlated group
Loss limits	Daily, weekly and drawdown rules
Execution	Exchange, order types, reduce-only stops on futures
Security	2FA, whitelist, where reserves are held
Records	Journal fields and tax ledger
Review	Weekly and monthly routine
Kill switch	Numeric conditions to pause or retire the plan

Part 3: A worked example plan

This example uses the trend-following ideas from Crypto Trend Following Strategy. It is for learning, not a recommendation.

• Account: $3,000, spot only, no leverage.
• Universe: the 20 largest coins by market value, excluding stablecoins, refreshed monthly.
• Filter: new entries only while Bitcoin's daily close is above its 200-day moving average.
• Entry: a daily close above the previous 20-day high; buy at the next open with a limit order a little above the open price.
• Stop and exit: the 20-day channel midpoint, trailing; exit at the next open after a daily close below it.
• Risk: 0.75% of current equity per trade; costs assumed at 0.4% per round trip.
• Caps: at most four open positions and 3% total open risk.
• Loss rule: if equity falls 15% from its peak, cut risk to 0.4% until it recovers half the drawdown.

Part 4: Test it in stages

1. Backtest. Use daily data that includes coins that later collapsed, enter at the next open, charge fees and slippage, and measure expectancy, drawdown, results by year and a comparison with holding Bitcoin. Follow How to Backtest a Crypto Trading Strategy.
2. Robustness. Check that 15-day and 30-day lookbacks also work reasonably, test a later out-of-sample period, and run a reshuffle simulation of your trade list as described in Risk of Ruin.
3. Paper trade forward for at least three months or 30 signals, whichever is longer, recording each signal at the time it happens, not afterwards.
4. Go live small: start at a quarter of planned risk (here about 0.2% per trade) for the first 30 trades.
5. Scale up to full risk only if live results, costs and your rule-following rate are in line with the tests.

Use DanioX's live setups as a reference, not a replacement: Signals shows how breakout setups behave in real time, and Signal Backtests shows how backtests and live records compare. If your own plan's live behaviour differs wildly from published ones built on similar rules, find out why.

Part 5: The kill switch

Write these numbers down before going live:

• Pause and review if the drawdown reaches 1.5 times the worst drawdown in your backtest.
• Review if, after 50 live trades, expectancy is below zero and outside the range your reshuffle simulation called normal.
• Stop immediately if you break the same rule three times in a month. The problem is then execution, not the strategy.
• Never change rules in the middle of a drawdown. Changes go through the same testing process as the original plan.

Part 6: Review schedule

• Daily (5 minutes): check signals after the close, update stops, log actions.
• Weekly (30 minutes): journal review, rule-following rate, expectancy in R; see Trading Psychology and Journaling.
• Monthly: export exchange records, compare live results with the backtest, check security settings.
• Quarterly: review the whole plan, rebalance any long-term holdings, re-check local rules and taxes.

Your final assignment

1. Fill in every line of the template.
2. Backtest it honestly and record the results, including what you tried and rejected.
3. Paper trade it for three months with a full journal.
4. Write a one-page review: what worked, what did not, and what you will change and test next.

Congratulations on finishing the Crypto Trading Course. Complete the quiz to earn your certificate, and keep this course as a reference: the lessons on Position Sizing, Liquidation Price and Risk of Ruin are worth re-reading every few months.