I decided to make a small bonus lesson. I hope that you have completed a simple homework assignment to the last lesson, which included making 10 test trades on a demo account.
I will show the whole process from opening to closing a trade in this lesson.
So, we have already set up a working area in Metatrader 4, the elements, colors, and layouts have been chosen in a way that makes it convenient for us to use the platform.
The trade that I will show is quite spontaneous. But this is the way I trade most of the time.
Please do not try to adopt any trading approaches, entry, or exit points right now—I’ll talk about them in detail at the next training level. For now we just need to make sure we don’t have any technical difficulties with opening and closing orders.
My attention was attracted by the GBP/USD currency pair; the timeframe is set to H1 by default.
After a sharp increase, I noticed that the price consolidated in the corridor throughout the trading session and is now decreasing. I determined that this was a false move and the price will return to the corridor, so I opened a long position on the market.
The chart shows my order and the price in the following way:
Now it’s time to set the Stop Loss and Take Profit levels. I do not consider SL and TP levels based on the trade risks. Instead, I’m guided by the graph. As a result, the levels were as follows:
Now the chart looks like this:
You probably noticed that SL exceeds TP if you have read about any forex trading classes or were previously interested in risk management. I will explain this point in detail in my lesson on risk management, so I do not advise you to drop the rate right now.
In the following hour, the price reached the target and the TP was triggered.
The trade is no longer displayed in the Trade Window and is now visible in the History window in the trading platform.
The bright green Take Profit field means the trade was closed with a TP order.
After having gone through this lesson, I think you should be familiar with how to open and close positions. Now you can move to more interesting topics! This bonus lesson is not dedicated to teaching any kind of trading strategy, this is just an illustration of how to open and close trades. I will explain my trading attitude in detail in the second level of the course (be sure to read it carefully).
Now let’s move to the last lesson of level one. I promise, you will like it!
P.S. By the way, having already turned off the computer and finished writing this lesson for you, I realized there would be some people who would ask in the comments the reason for closing the trade by me so early. Especially for them, I’m posting a screenshot of what happens on the market after TP worked:
Best regards, Pipbear
What is your preferred time frame is this applicable for short term trades too?
There is something I did not quite understand, how did you know it was a false move? I would like you to expound more on this area
Agreed, relying on risk reward to place your take profits and stop losses is wrong. The resistance and support levels are just fine.
Can you method be automated?
Failure to put the Risk: Reward in place can be detrimental. A few wrong trades can mess up all your gains. I would not take that deal if it were me, any deal that does not give me 1:2 risk reward ratio is not worthy my time.
Do you make use advanced entry and exit?
Thank you Pipbear for sharing this valuable knowledge
I personally find this very helpful, and will form part of my trading system
What indicators do you make use of?