Your First 0DTE Trading Plan – Ready, Set, Trade

A 0DTE trading plan is a comprehensive, written document that outlines your complete approach to trading options that expire the same day. Unlike general trading guidelines, a proper 0DTE plan addresses the unique challenges of compressed timeframes, accelerated time decay, and the specific market dynamics that occur within a single trading session. This plan serves as your personal rulebook, covering everything from pre-market preparation and trade selection criteria to position sizing, risk management, and specific exit strategies. Having a detailed, written plan is particularly crucial for 0DTE trading because the fast pace and emotional intensity of same-day expiration options leave little room for improvisation or unclear decision-making.

Importance for Trading

Developing a comprehensive 0DTE trading plan is crucial because:

• It provides clear guidelines when emotions run high during rapid price movements
• It prevents impulsive decisions by establishing rules before money is at risk
• It creates consistency in your approach across different market conditions
• It helps you identify what works by documenting your process and results
• It serves as a feedback mechanism for continuous improvement
• It transforms 0DTE trading from gambling to a structured business

"Trading without a plan is like driving in a foreign country without a map—you might occasionally arrive somewhere interesting, but you'll likely get lost, waste resources, and eventually crash."

The Restaurant Owner Story

Meet Elena, who is preparing to open her first restaurant after years of working as a chef in other establishments. Her methodical approach to planning and launching her restaurant perfectly illustrates how a comprehensive trading plan works for 0DTE options trading.

The Importance of Detailed Planning

Elena has invested her life savings of $200,000 to lease a space and launch her restaurant. As the opening day approaches, she spends countless hours developing a detailed business plan.

"Many new restaurant owners focus only on the food and ambiance, but fail because they don't have a comprehensive plan for all aspects of the business," Elena explains to her sous chef, Marco. "I'm determined not to make that mistake."

Elena shows Marco her thick binder containing the restaurant's business plan. It covers everything from menu design and pricing strategy to staffing schedules, inventory management, customer service protocols, and financial projections.

"This plan is my roadmap to success," Elena emphasizes. "Without it, I'd be making critical decisions based on emotion or guesswork rather than a thought-out strategy."

Marco notices the level of detail in the plan. "You've really thought of everything," he comments, flipping through sections on handling customer complaints, managing food costs, and even specific procedures for opening and closing the restaurant each day.

"The restaurant business is incredibly demanding and fast-paced," Elena responds. "Once service begins, there's no time to figure things out on the fly. Every decision needs to be guided by pre-established procedures and principles."

She points to a section titled "Daily Operations Schedule" that breaks down the entire day into 15-minute increments, from morning prep to final cleanup.

"This level of detail might seem excessive, but it's necessary when operating in an environment where small mistakes can quickly compound into disasters," Elena explains. "The plan doesn't just tell us what to do when things go well—it also outlines exactly how to respond when problems arise."

"A trading plan is like a restaurant business plan—it needs to cover not just the ideal scenarios but also how you'll handle the inevitable challenges and unexpected situations."

This illustrates the importance of detailed planning for 0DTE options trading. Just as Elena created a comprehensive business plan covering all aspects of her restaurant operation, traders need a detailed plan that addresses every aspect of their 0DTE trading approach. This includes pre-market preparation, specific entry and exit criteria, position sizing rules, risk management protocols, and procedures for handling various market scenarios. Without this level of detail, traders are likely to make inconsistent, emotional decisions during the fast-paced trading day.

Pre-Session Preparation

On the morning of the restaurant's opening day, Elena arrives three hours before the first customers are scheduled to arrive. She has a specific pre-opening routine designed to ensure everything is ready for a successful day.

"What we do before we open is just as important as what we do during service," Elena tells her team as they gather for the morning briefing. "Proper preparation prevents poor performance."

Elena's pre-opening checklist includes:

1. Reviewing the reservation list and table assignments
2. Checking inventory levels for key ingredients
3. Briefing staff on daily specials and any menu changes
4. Inspecting the dining area for cleanliness and proper setup
5. Testing all equipment to ensure it's functioning properly
6. Reviewing weather forecasts that might affect customer volume

"This preparation routine isn't just about checking boxes," Elena explains. "It's about getting mentally prepared and ensuring we have all the information we need to make good decisions during the rush."

Marco observes how Elena's demeanor changes during this preparation time. She's focused, methodical, and calm—creating the mental state she'll need during the hectic service hours.

"The pre-opening routine also helps me get into the right mindset," Elena confirms when Marco mentions this. "Restaurant service is emotionally and mentally demanding. This preparation time allows me to center myself and focus on executing the plan rather than reacting emotionally to whatever happens."

"Pre-session preparation in trading is like a restaurant's opening routine—it sets the stage for success by ensuring you have the right information, tools, and mindset before the action begins."

This demonstrates the importance of pre-session preparation in 0DTE trading. Just as Elena has a specific routine before her restaurant opens, traders should develop a pre-market routine that includes reviewing key levels, checking economic calendars for potential market-moving events, identifying specific trade setups to watch for, and getting into the proper mental state. This preparation creates the foundation for disciplined execution when the market opens and the fast-paced action begins.

Clear Entry and Exit Criteria

As the restaurant opens and customers begin to arrive, Elena implements her carefully designed service system. She has established clear criteria for every aspect of the customer experience.

"One of the most important parts of our plan is having precise standards for every decision we make," Elena explains to Marco during a brief lull. "From when to seat customers to how to time each course and when to present the check—nothing is left to guesswork."

Elena shows Marco the service guidelines, which include specific criteria like:

• Seating customers only when their complete party has arrived
• Taking drink orders within 3 minutes of seating
• Delivering appetizers within 12 minutes of ordering
• Checking on tables 2 minutes after serving each course
• Presenting the check within 3 minutes of clearing dessert plates

"These aren't arbitrary rules," Elena emphasizes. "Each guideline is designed to optimize the customer experience and our operational efficiency. They tell us exactly when to take action rather than leaving it to subjective judgment."

Marco notices how these clear criteria eliminate confusion among the staff. When a large party arrives with only half their group present, the host politely directs them to the bar area rather than seating them, following the established protocol.

"Without these clear guidelines, different staff members would make different decisions based on their personal judgment or emotions," Elena points out. "That inconsistency would create chaos during busy periods and ultimately hurt our business."

"Clear entry and exit criteria in trading are like a restaurant's service standards—they remove subjectivity and emotion from your decisions, creating consistency even during the most hectic periods."

This illustrates the importance of clear entry and exit criteria in 0DTE trading. Just as Elena established specific standards for every aspect of restaurant service, traders need precise, objective criteria for when to enter trades, when to take profits, and when to cut losses. These criteria should be specific enough that there's little room for subjective interpretation, which helps maintain consistency and discipline during the emotional ups and downs of trading.

Risk Management Protocols

During the lunch rush, a server accidentally drops a tray of drinks, shattering glasses near a table of customers. Elena immediately implements her pre-established incident response protocol.

"This is exactly why we have risk management procedures in place," Elena tells Marco as they efficiently handle the situation. "Accidents are inevitable in a restaurant. What matters is how quickly and effectively we respond."

Elena's risk management protocol includes:

1. Ensuring customer safety first (moving them away from broken glass)
2. Containing the damage (blocking off the area)
3. Resolving the immediate issue (cleaning up the spill)
4. Compensating affected customers (complimentary desserts)
5. Preventing recurrence (addressing any underlying causes)

"Notice how we don't have to figure out what to do in the moment," Elena points out. "The protocol gives us a step-by-step response that minimizes damage and maintains customer satisfaction."

Marco observes that Elena's response is calm and methodical, despite the potential embarrassment and cost of the incident.

"That's because I'm not making emotional decisions—I'm following a pre-established plan," Elena explains. "When you have clear risk management protocols, you can respond rationally rather than reactively, even in stressful situations."

"Risk management protocols in trading are like a restaurant's emergency procedures—they provide a pre-planned response to adverse events, preventing small setbacks from becoming major disasters."

This demonstrates the importance of risk management protocols in 0DTE trading. Just as Elena had specific procedures for handling accidents in her restaurant, traders need clear rules for managing risk, including position sizing guidelines, maximum loss limits per trade and per day, and specific actions to take when trades move against them. These protocols help prevent emotional reactions during drawdowns and ensure that no single mistake can significantly damage the trading account.

Performance Review and Adaptation

After closing time on the first day, Elena gathers her staff for a detailed review session. Despite the overall success of the opening, she's focused on identifying areas for improvement.

"Our plan isn't set in stone—it's a living document that we'll continuously refine based on real-world results," Elena explains as she opens her notebook. "Today gave us valuable data about what worked and what needs adjustment."

Elena leads a structured review process:

1. Analyzing sales data (which menu items performed well or poorly)
2. Reviewing service timing (where delays occurred)
3. Discussing customer feedback (both positive and negative)
4. Identifying operational bottlenecks (kitchen backup during peak hours)
5. Collecting staff observations and suggestions

"Based on today's performance, we need to make several adjustments to our plan," Elena concludes after the discussion. She outlines specific changes:

• Increasing prep quantities for the unexpectedly popular seafood special
• Adjusting the table assignment system to better balance server workloads
• Modifying the timing of appetizer delivery to prevent kitchen backups
• Adding an additional expediter during peak hours

"The key is making data-driven adjustments rather than reactive changes," Elena emphasizes. "We're not abandoning our plan—we're refining it based on objective feedback."

"Performance review in trading is like a restaurant's after-service meeting—it transforms experience into improvement by identifying what worked, what didn't, and what specific adjustments will enhance future performance."

This illustrates the importance of performance review and adaptation in 0DTE trading. Just as Elena conducted a structured review after her restaurant's first day, traders should regularly analyze their trading performance, identifying patterns in their successful and unsuccessful trades. This review process should lead to specific, incremental improvements to the trading plan rather than reactive overhauls based on recent outcomes.

Using a 0DTE Trading Plan in Real-Time Trading

How to Create Your Pre-Market Routine

Real-time example: It's 8:30 AM, and you're preparing for a day of 0DTE options trading when the market opens at 9:30 AM.

How to implement an effective pre-market routine:

1. Market analysis: Review futures, pre-market movers, and overnight news
2. Level identification: Mark key support/resistance levels on your charts
3. Watchlist preparation: Identify 3-5 specific securities with potential setups
4. Scenario planning: Determine how you'll approach different market conditions
5. Mental preparation: Center yourself with a brief mindfulness or focus exercise

"Your pre-market routine is like a pilot's pre-flight checklist—it ensures all systems are checked and ready before you take off into the trading day."

Action plan:

• Create a written pre-market checklist to follow each morning
• Set aside 30-45 minutes before market open for thorough preparation
• Review economic calendars for potential market-moving events
• Identify specific levels where you might enter trades on your watchlist items
• Determine your maximum risk for the day based on market conditions
• Take a few minutes for deep breathing or visualization to establish mental clarity

How to Establish Clear Entry Criteria

Real-time example: You're watching SPY for potential 0DTE options trades and need to determine exactly when to enter.

How to create objective entry criteria:

1. Define setup patterns: Specify exactly what chart patterns constitute valid entries
2. Establish confirmation signals: Require multiple indicators to align before entering
3. Set timing parameters: Determine which times of day you will or won't enter new positions
4. Create a scoring system: Assign points to different criteria to rate setup quality
5. Document with examples: Include chart images of valid setups in your plan

"Clear entry criteria are like a restaurant's reservation policy—they establish exactly who gets in and who doesn't, removing subjective judgment from the process."

Action plan:

• Write down specific, objective criteria for valid trade setups
• For example: "Enter SPY calls when price breaks above the 9:45 AM high with above-average volume and MACD crossing above signal line"
• Create a checklist for each setup type to verify all criteria are met
• Include minimum requirements for different market conditions
• Establish rules for which setups warrant larger position sizes
• Practice identifying these setups on historical charts before trading real money

How to Implement Position Sizing Rules

Real-time example: You've identified a valid setup on QQQ according to your entry criteria and need to determine how many contracts to trade.

How to create effective position sizing rules:

1. Base size on account percentage: Determine maximum risk per trade (e.g., 1-3% of account)
2. Adjust for setup quality: Vary size based on how many criteria the setup meets
3. Consider market conditions: Reduce size during volatile or uncertain conditions
4. Account for option characteristics: Adjust for factors like days to expiration and strike selection
5. Implement a scaling system: Define rules for adding to positions or scaling out

"Position sizing rules are like a restaurant's inventory management system—they ensure you allocate your resources appropriately based on demand and conditions."

Action plan:

• Establish a base risk amount per trade (e.g., 2% of your account)
• Create a scoring system for setup quality (e.g., 1-5 points)
• Define how position size varies based on setup score
• For example: "3-point setup = 1.5% risk, 4-point setup = 2% risk, 5-point setup = 2.5% risk"
• Reduce standard position size by 30-50% during high VIX or uncertain market conditions
• Document your position sizing decision for each trade to ensure consistency

How to Set Clear Exit Criteria

Real-time example: You've entered a 0DTE call option on SPY and need to determine exactly when to exit for profit or loss.

How to establish objective exit criteria:

1. Define profit targets: Set specific price or percentage targets for taking profits
2. Establish stop-loss levels: Determine exactly where you'll exit losing trades
3. Create time-based exits: Set specific times when you'll exit regardless of price
4. Implement scaling rules: Define when and how much to scale out of positions
5. Plan for different scenarios: Have exit strategies for various market conditions

"Exit criteria are like a restaurant's closing procedures—they establish exactly when and how to conclude the process, preventing emotional decisions about staying open 'just a little longer.'"

Action plan:

• Set specific profit targets based on technical levels or percentage gains
• For example: "Take 50% of position off at 30% profit, remainder at 50% profit or by 2:00 PM"
• Establish stop-loss levels based on technical levels or maximum acceptable loss
• Create time-based exit rules, especially for the afternoon hours when time decay accelerates
• For example: "Exit all long call positions by 2:30 PM unless they're at least 30% profitable"
• Document these criteria in your plan and review them before each trade

How to Conduct Effective Trading Reviews

Real-time example: You've completed a week of 0DTE trading and want to improve your results going forward.

How to implement a structured review process:

1. Gather comprehensive data: Record all aspects of your trades, not just P&L
2. Analyze patterns: Look for commonalities in winning and losing trades
3. Compare to your plan: Determine how closely you followed your rules
4. Identify specific improvements: Pinpoint exact changes to make to your plan
5. Implement and monitor changes: Track the impact of your adjustments

"Trading reviews are like a restaurant analyzing its sales data—they transform raw experience into actionable insights that improve future performance."

Action plan:

• Schedule a weekly review session (e.g., Sunday afternoon) to analyze your trading
• Create a spreadsheet or journal template to record detailed information about each trade
• Calculate key metrics like win rate, average win/loss, and profit factor
• Look for patterns in your best and worst trades
• Identify specific aspects of your plan that need refinement
• Make small, incremental changes rather than complete overhauls
• Track the impact of these changes over time

Practical Template for Your First 0DTE Trading Plan

1. Trading Goals and Parameters

• Account size: Define your starting capital
• Risk per trade: Maximum percentage of account risked on any single trade
• Daily risk limit: Maximum total risk exposure for the day
• Trading hours: Specific hours you will actively trade
• Trading frequency: Expected number of trades per day

2. Pre-Market Routine

• Wake-up time: When you'll start your day
• Market analysis: Specific sources and information to review
• Watchlist creation: Process for selecting potential trades
• Level identification: How you'll mark key support/resistance
• Mental preparation: Techniques to establish proper mindset

3. Entry Criteria

• Setup types: Specific patterns you'll trade (e.g., breakouts, reversals)
• Confirmation signals: Technical indicators required for entry
• Timing factors: Time-of-day considerations for entries
• Filters: Conditions that would invalidate otherwise valid setups
• Examples: Visual examples of valid entry setups

4. Position Sizing Rules

• Base risk amount: Standard risk per trade
• Adjustment factors: How size varies based on setup quality
• Maximum position: Absolute limit regardless of setup quality
• Scaling rules: Criteria for adding to positions
• Correlation considerations: Adjustments for correlated positions

5. Exit Criteria

• Profit targets: Specific levels or percentages for taking profits
• Stop-loss levels: Where you'll exit losing trades
• Time-based exits: When you'll exit regardless of price
• Scaling out rules: How you'll take partial profits
• Adjustment criteria: When and how you'll adjust stops

6. Risk Management Protocols

• Maximum daily loss: Point at which you'll stop trading for the day
• Circuit breakers: Conditions that would pause your trading
• Position limits: Maximum number of concurrent positions
• Correlation rules: Limits on similar or related positions
• Black swan procedures: How to handle extreme market events

7. Record Keeping and Review

• Trade journal format: How you'll document each trade
• Review schedule: When you'll analyze your performance
• Key metrics: Specific measurements to track
• Improvement process: How you'll implement changes
• Accountability system: How you'll ensure adherence to your plan

Remember, a trading plan is a living document that evolves with your experience. As trading educator Mark Douglas notes, "The best trading plan is not necessarily the most profitable one initially, but the one you can actually follow consistently." Start with a plan you can realistically implement, then refine it based on your results and growing experience in the challenging but potentially rewarding world of 0DTE options trading.