HOW TO TRADE ONLINE
Yes, we are starting this with a simple ‘How to’ lesson. If you are completely new to trading you will need a brief overview of how to open a position, close a position, set stop-loss and take-profit, and change lot sizes. I’ll be using a common platform layout (most of them look very similar) some are black, some are white, and some will let you choose. I like the black because it’s easier on the eyes.
So let’s get started
Navigating the platform
Down the right-hand side you have the social trading – basically lets you follow and copy successful traders and gives a live feed of the trades they are opening and closing, and whether they made a profit.
Down the left-hand side, there is a list of assets (currency pairs) to trade.
At the bottom, there is a list of trades. There are three tabs here for Open Positions, Pending Orders, and Closed Positions.
And in the center, you have the trading chart. This one is NZDUSD with 5-minute candlesticks. For the sake of simplicity, I’m only going to show the centre for future diagrams.
Opening a position
So here we have a blank chart for EURUSD, no indicators at all. At the top of the trading chart, there are red and green buttons for SELL and BUY. In between those buttons is the amount (in Lots*) that you want to buy/sell.
*1 Lot=100,000 Units of currency therefore 0.1 Lot=10,000 Units of currency and 0.01Lot=1000 Units of currency
In this example, we are going to BUY 0.01Lot of EURUSD. Click the green BUY button and a new window will appear.
It will indicate the Instrument, that’s the currency pair
The desired price, the price at which you wanted to open this position
The type of position, in this case, BUY
The amount to buy, 0.01Lot
It also shows the T/P and S/L, these are Take Profit and Stop Loss.
So that’s what we cover next.
Edit a position – Stop Loss & Take Profit
Two reasons you will want to edit a position, to create a Stop Loss or Take Profit. Unless you intend to open and close within a short space of time there will be times when you can’t keep an eagle eye on all of your trades. Stop Loss will prevent a sudden drop from wiping out your account. And Take Profit will ensure that you take the profit if your trade reaches its expected peak, and then drops again. You don’t want to miss that peak.
Now that you have an open position, you can see it at the bottom of the chart, you will see two empty fields. These are Stop Loss and Take Profit,
Clicking on either (or both) of these will open an “Edit Order” box
For Stop Loss (S/L) edit the white box with a price that reflects the maximum you are willing to lose in this *trade. That will be reflected in the estimated profit or loss in the box directly below it.
To Take Profit (T/P) edit the white box with a price that reflects what is expected in the amount of time you intend leaving the trade open. The expected profit from that price will be shown in the box directly below.
I like to put in a T/P just under my projected high then I can take the profit even if it doesn’t quite reach my expectations.
Close a Position
So we’ve opened a position, edited one, now we’re going to close one. You’ll like this, it’s really simple. Remember your open position at the bottom of the chart?
Well, now we’re going to close it.
Each open position has a close button at the end.
You can close individual positions or (perhaps at the end of the day or week) you can close them all using the “CLOSE ALL” button under the list.
I’m going to close all of them because I’m losing badly on these trades today. That will teach me not to do any technical analysis before placing trades.
At least I used my demo account.
So there we go some basic actions on a trading platform.
Before we finish up I’ll draw your attention to the bar at the very bottom of the screen. Under the open positions is where you will find your balance, how much you have won/lost and your margin.
This is clearly important information so keep an eye on it when you have open trades. Equity is important to keep tabs on because it is the balance of your account plus or minus the profit/losses of your open positions.
If you look at my balance it stands at €39,988.12 but the equity in my account is only €39,982.24. That difference is the €5.88 that my trades are currently losing.
The margin (right there in the middle) is the amount of margin in use.
Credit, right at the end, is how much has been deposited in the account.
That should be enough to get you started.