Trading for beginners

How to Make a Trade

While each trading platform is different, walking you through the process of making a trade can be useful. By now you know all trading involves risk. Only risk capital you are prepared to lose and that past performance does not guarantee future results. Here are the steps using forex trading platform. Let's say you have decided to trade USD/CHF. You check your watchlist and see it's actively trading and trending down right now with best forex broker.

You go to the chart and check your support and resistance. You want to buy just after support and sell just before resistance. So you set up your trade and set your stops. This chart has three places where you could have entered the trade at support and exited near resistance.

You decide to enter a buy position at 1.0052. You decide to set your stop loss at the resistance line of 1.0043. Support is at 1.0075, but you decide to set it a little under support at 1.0070 to grab profits if it turns before the top. That gives you an upside of 20 pips and a downside of 7 pips minus the spread. You've checked the fee schedule and know the spread is 3 pips.

You click the plus or minus tab, or just click on the amount and change it to the amount of money you want to trade. You choose your leverage ratio. As you click on the leverage tab, it will give you the different amounts of leverage you can use, from no leverage (1 x) from no leverage (1 x) up to as high as 400x on some currencies, which is an incredibly high risk. As you put in your amount and leverage, your preset stops and limits will update automatically.

Go in and click on them to set the limits you've chosen. You can choose a dollar amount, or you can choose a percentage. If you decide you are only willing to take a 5% loss, you will set your stop loss at 95%. If the value of your trade drops below 95%, it will trigger the sale. On the other side, you may preset a 10% profit point. Simply type in the rate '1.10' and the platform will convert that to a dollar amount that takes into account your leverage.

Then simply click the open trade button creative FX demo account or trading account. When you trade with preset exit points, you take the emotion out of the trade. You let the market make its little swings without panic. You've chosen the maximum loss you're willing to risk against the hoped for gains. Either the trade will trigger a win or a loss. You are free to focus on your next trade.