FOREX SPOT TRADING SHORT COURSE
Time to learn: a couple of hours – one day
Examples of orders (orders) that you give to your broker, according to the recommendations received from us.
Every day, except weekends, between 7:00 and 8:00 London time you receive messages from us in Telegram and also in Facebook. Messages can be of three types.
- A trading recommendation in which we advise you to place an order to buy or sell a currency pair or a buy-sell option on a currency pair
- “No recommendations”: this means that we have not currently found evidence for any of the financial instruments that we can trade relatively safely. Therefore, you do not do anything in your broker’s trading system.
The third type of message you receive is when we are already in some open position, the market is, of course, moving, and we recommend moving the stop loss (SL) to a more break-even level or setting a take profit (TP).
When you receive a trading recommendation to open a new position on Forex Spot, that is, to sell or buy a currency pair at a certain price, you need to immediately place this recommendation through your phone, tablet or computer with your broker in the form of an order, also known as an order. It takes no more than a couple of minutes. But take your time, double-check everything carefully. Once we organized a comic competition among our clients on the speed of placing orders with a broker based on our recommendation. Everyone who expressed a desire to participate was ready at 7-25 London time, with Telegram open. We publish the recommendation and competitors begin placing orders. Then they sent us screenshots that contained order confirmations from the broker down to the second. The winner was the guy from Shanghai, who placed orders in 12 seconds and did not make a single mistake in this rush. A guy from Shanghai received a bottle of very good whiskey from us. But many competitors made mistakes in a hurry. Therefore, take your time, do everything thoughtfully and double-check carefully.
There are several types of orders to open a position. We will mainly use “Limit”, “Stop” orders and, quite rarely, “Market” orders.
ORDER “LIMIT”
The most commonly used pending “Limit” order. We use this order if we are going to sell a currency pair at a price higher than the current market price. And mirrored, if we place a limit order to buy a currency or futures, then only at a price that will be lower than the current quote. What is the point: you and I place an order, assuming that if the rate of a currency pair or futures rises, with a limit order to sell, or falls, when buying, to our limit order, the order will work, that is, we will sell or buy at a more profitable price price, from where movement in our direction will begin over some time.
An example of a trading recommendation for setting a limit order that you will receive from us. Of course, currency pairs, position opening prices, stop losses (SL) and take profits (TP) will be different.
USDCAD current price – 1,3600
NEW RECOMMENDATION
FX spot. Limit order BUY USDCAD – 1,3585; SL-1,3535; TP – 1,3695.
Almost all brokers in their trading interface offer you to set a stop loss (SL) and take profit (TP) after you place a sell or buy order or make a trade on the market. Filling one order, for example a stop loss, automatically cancels another, that is, a take profit.
A few words about what stop loss is. Suppose our order to buy 100000,00 USDCAD was triggered, we bought, but the market did not move in our direction, this happens in at least 30 percent of transactions, but continues to move down. The CAD is strengthening against the US$. We set a loss limiter, which is called a stop loss. In our case, 1,3535. An order to close a position, make a reverse transaction – buy 100 thousand USDCAD.
This order will trigger, well, a loss, but limited. And our take profit order at 1,3695 will be automatically cancelled. One cancel other. Execution of one order cancels the second. It will be the same if the market moves in our direction, we take profit, take profit at 1,3695, our stop loss at 1,3535 will be automatically canceled. One cancel other.
So, let’s look at the broker’s trading window to see how you will place an order according to our recommendation. Let me explain that your broker’s trading window may look different, but all the principles are the same. The image, using the trading interface of one of the world’s leading brokers, highlights all the parameters that you must set when receiving a recommendation from us.
Go to your broker, open the trading window, see the current price USDCAD – 1,3600, and carefully set:
NEW RECOMMENDATION
Limit order BUY USDCAD – 1,3585; SL-1,3535; TP – 1,3695.
Currency pair: USDCAD – OK
Order type: Limit. OK.
Buy/Sell: BUY. OK
Amount: 100,000. OK (each investor knows his own amount, which he trades in accordance with risk management. For accounts 5k-10k USD, the amount is 100,000. No more)
Price: 1,3585. OK
Take profit: 1,3695. OK
Stop Loss: 1,3535. OK
Duration: valid until canceled (GTC). Any broker has this item by default.
We carefully check all the parameters set. Click the button to place an order. A verification window appears. Let’s check everything again. Click confirm order again, and confirmations from the broker for all orders we have placed appear in the window on the right.
You will also be able to see all your open orders in the order panel of the interface. And also all your open positions.
WORKOUT
We recommend that you practice for several days on a so-called demo account. This is a training account with virtual money from any broker. Practice placing orders, canceling orders, changing orders.
STOP ORDER
We use this order to open a position when we see the advisability of buying or selling “on a breakout.”
For example, now the EURUSD rate is 1,1350. As a result of market analysis, we determine that if the rate breaks upward (euro strengthening) the resistance line of 1,1400, then there is a serious percentage of trend development and further upward. BUT buying now “on the market” is still risky (the risk must be justified), placing a “Limit” order below the current level of 1,1350 – why? And in no other way can we give a command to the broker to buy EURUSD for us after reaching the rate of 1,1400 as soon as we apply the BUYSTOP order
Example Recommendation
03.03.2023; 7:45 London time
NEW RECOMMENDATION
Order SELLSTOP GBPUSD(0,5 sum) – 1,1895; SL-1,1943
We assume that a break below 1,1900 will give us the opportunity to profit from the downward movement (strengthening the dollar against the pound). Pay attention to (0,5 sum). This means that we recommend placing an order and opening a position not for the usual, standard amount that you trade according to our risk management rules, for example, 100k, but for half, that is – 50k. We do not provide Take Profit (TP) recommendations. If the order works and the position is opened, then after a while we will be able to recommend TP to you.
We go to the broker and set all order values according to our recommendation. We carefully check all the parameters set. Click the button to place an order. A verification window appears. Let’s check everything again. Click confirm order again, and confirmations from the broker for all orders we have placed appear in the window on the right.
ORDER “BY MARKET”
Very rarely, in about 15 percent of 100 recommendations for opening positions, we suggest opening a position on the market (by market), right now, and not through placing pending Limit or Stop orders.
But there are days when, during our morning market analysis, we discover that it makes sense to open a position right now. This is how the situation develops. Example recommendation:
03.03.23 07:45 London time
NEW RECOMMENDATION
Right now BUY USDJPY(0,5) by market rate – appr. 136,23; SL – 135,74
We recommend buying half of a regular position right now at the market price. “Appr. – approximately”. You may not see our message immediately, but after a few minutes or half an hour, and the rate may no longer be 136,23, but higher or lower by a couple of dozen points. Buy or sell (depending on the transaction specified in the recommendation) on the market, at the moment you see the message and log in to your broker. But if you see that the rate has deviated very much from the values indicated in the recommendation, refrain from the transaction.
Be sure to practice placing Limit and Stop orders to open positions, changing orders, buying and selling on the market, changing Stop Loss, changing Take Profit. Open a demo account with any broker and within a couple of hours you will master all the above skills.
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