A trading plan is a well-defined set of rules and guidelines that help traders make informed trading decisions. It includes the trader's goals, risk tolerance, entry and exit points, risk management techniques, and the trading strategy. A trading plan helps traders stay disciplined and focused on long-term profitability, avoiding emotional trading and impulsive decisions. It should be reviewed and adjusted as needed based on the market conditions and the trader's performance. A trading plan is essential for beginners and experienced traders alike, as it helps reduce the risk of significant losses and improves the chances of profitability.