MetaTrader 4 - Buying or Selling?
The process of trading - an easy explanation:
Understanding the direction of the graph:
If the candles are moving upward, it means that the first currency in the combination (example GBP/USD) is getting stronger. We will activate a Buy transaction.
If the candles are moving downward, it means that the first currency in the combination (example GBP/USD) is getting weaker (and the second one is getting stronger). We will activate a Sell transaction.
To Activate a trade:
There are several ways in MT to activate a transaction - in order to activate a trade (Buy or Sell) you have to see the Order window.
a. Click on the New Order icon at the top of the screen to see the Order window.
b. OR: Press the F9 key on the keyboard to see the Order window.
c. OR: Right-click on the graph and select Trading / New Order in the popup menu
Order window: (Here you will activate a Buy or Sell trade)
Symbol = the currency combination you are going to trade
Volume = the amount of money you are going to trade with
If you are trading on a Standard Account:
You have to multiply the Volume amount with 1,000 (= 1 standard lot) to know how much money will be used for the trade transaction:
If you are trading on a Mini Account:
You have to multiply the Volume amount with 100 (= 1 standard mini lot) to know how much money will be used for the trade transaction:
In order to balance the risk (= trade more safely) we will never trade with more than 5% of the money in the account.
Professional traders will trade with even smaller amounts (only 1% - 2% of the account size).
Stop Loss = a way of protecting yourself when in a trade by placing an order of where a trade should be closed if the market starts to move against you.
You can enter a stop even before you activate a trade by entering the value of where the stop should be.
Otherwise you can leave the stop open for the moment, but will have to activate a stop immediately after you entered a trade.
At times the market can move extremely quick and trading without a stop is a sure way of losing large amounts of money.
You can read more about using a stop here:
Take Profit = a place where you would like the trade to be closed in a profitable situation.
You willclick in the Order window on the Buy or Sell button to activate a trade.
If a graph is moving higher, we will activate a Buy transaction by clicking the Blue Buy button.
If a graph is moving lower, we will activate a Sell transaction by clicking the Red Sell button.
When you activate a trade, a green dotted line will be visible on the graph to show where the entry is.
If you enter a Stop Loss or a Take Profit, it will be visible as red dotted lines.
You can also see the active trade in the Terminal Window (Trade Tab) on the bottom of the screen.
To Close a trade:
Right-click in the Terminal Window (Trade Tab) on the active trade and select Close Trade.
The active trade is seen here as the trade on the blue background (just above the grey line with the Balance).
You can also double click on the active trade in the Terminal Window (Trade Tab) and the Order window will appear with a Yellow bar below the Sell and Buy buttons.
Click on the Yellow bar (CLOSE) below the Sell and Buy buttons to close the trade.
In a recent update for MT4 they added another easy and quick way to close a trade:
Click on the X on the right of the trade in the Terminal Tab to close the trade.
The nice thing about forex trading is that we buy from the brokerage and we sell back to the brokerage where our accounts are.
There is no need to run around looking for potential clients to convince to buy from us.
During and after every trade you will be able to see your balance in the Account History Tab of the Terminal Window.
This is a very simplistic explanation of the procedure. I did not talk about Lots, Margins, Leverage, Money Management and other important stuff in this article. More about those later on.
Read more about the Forex Masters Advanced Training Course.
Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Copyright 2013, FOREX MASTERS