The Trade Plan, and When Not to Trade At All
    Derivatives Intelligence
    31 of 57

    Module 9 · Lesson 3 of 3

    The Trade Plan, and When Not to Trade At All

    18 min readUpdated

    Combine support/resistance levels with derivatives data to build a complete trade plan template.

    Goal

    Create a repeatable trade plan template that combines price structure (support/resistance) with derivatives intelligence (OI, funding, liquidation clusters).

    Mistake This Prevents

    Entering trades based on one signal type, either pure TA or pure derivatives, and missing the full picture that only comes from combining both.

    Trade Plan Checklist: S/R + DerivativesPRE-TRADE CHECKLIST✓1. Trend DirectionHigher highs + higher lows = uptrend confirmed on daily✓2. S/R Level IdentifiedEntry near strong support / resistance, not mid-range✓3. OI Signal CheckedRising OI in direction of trade = conviction confirmation✓4. Funding Rate CheckedNot in extreme zone (>+0.03% or <-0.02%) for entry direction✓5. Liq Clusters MappedStop placed BEYOND nearest liquidation cluster, not inside
    This five-point checklist integrates technical analysis with derivatives data. Never skip the liquidation cluster check: stop placement inside a cluster is the most common avoidable mistake when trading with leverage.

    Core Concepts

    The Combined Trade Plan Framework

    A complete trade plan has six components:

    1. Trend Context

    • Is price above or below 200-day MA?
    • BTC dominance rising or falling?
    • Macro: risk-on or risk-off?

    2. Key Price Levels

    • Nearest support: ₹___
    • Nearest resistance: ₹___
    • HTF structure: higher highs/lows or lower highs/lows?

    3. Derivatives Check

    • OI direction + price direction = scenario (bullish/bearish/squeeze)
    • Funding rate: normal / crowded / extreme
    • L/S ratio: neutral / extreme
    • Liquidation cluster nearest to entry: ₹___ above / below

    4. Entry Trigger

    • What price action or event triggers your entry?
    • Example: "Price reclaims ₹68 lakh with OI rising"

    5. Risk Parameters

    • Stop-loss: ₹___ (beyond liquidation cluster or key level)
    • Take-profit: ₹___ (next resistance or squeeze target)
    • Position size: ___% of portfolio

    Position size

    Decide the loss first. The size follows from how far your stop sits from the entry.

    USDT
    %
    x

    Enter the entry and the stop to size the trade.

    6. Exit Rules

    • If funding goes extreme positive before target hit → reduce position
    • If OI collapses while in trade → reassess
    Conflict = No Trade Decision FlowS/R Level + SetupPrice at key zoneDerivsconfirm?YESENTERFull checklist passedNOSKIPSignal conflictRule: Signal Conflict → Cash is a positionMissing a trade costs 0%. A bad trade costs real capital. Conflict = stay out.
    When technical setup and derivatives data conflict (for example, price at support but funding extremely high and OI diverging) the correct action is to skip the trade entirely. Cash is a position that costs nothing.

    Real Example Trade Plan (BTC, October 2024)

    • Trend: Above 200MA, BTC dom rising, macro: Fed pause
    • Key levels: Support ₹55L, Resistance ₹68L
    • Derivs: OI rising + price rising (bullish), Funding +0.01% (neutral), L/S 55/45 (neutral)
    • Entry: Price holds above ₹58L on daily close
    • Stop: ₹54L (below support + liquidation cluster)
    • TP: ₹67L (below resistance)
    • Result: BTC ran to ₹68L, stopped 1.5% before TP

    Checklist

    • Fill all six sections before every trade
    • Do not enter if derivatives and price action conflict
    • Review the plan mid-trade if funding goes extreme

    Common Mistakes

    • Completing only the price section and skipping derivatives
    • Setting stops inside liquidation clusters
    • Not updating the plan when market conditions change mid-trade

    Fedha Tool Tie-in

    FedhaAcademy's Trade Plan Generator auto-fills the derivatives section from live CoinGlass data. You fill in the price levels and triggers. The tool flags conflicts between sections.

    Key takeaways

    What to remember

    1. A complete trade plan combines trend context, price levels, and derivatives intelligence.
    2. Never skip the derivatives check, because it reveals whether price moves are genuine or synthetic.
    3. Set stop-losses beyond liquidation clusters, not inside them.
    4. If derivatives and price action conflict, do not enter the trade.
    Lesson quiz

    Quiz

    Question 1 of 12

    Pass: 9 of 12 correct

    Question 1 of 12

    Which of the following is NOT a component of the combined trade plan framework?

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