MetaTrader 4 - Buying or Selling?

MT4 allows you to trade on the international currency markets, no matter where you are!

The process of trading - an easy explanation:

We sit in front of a computer looking at graphs of the various currency combinations.   By keeping fundamental factors in mind (fundamental trading) and by looking at patterns in the candles as well as a combinations of indicators (technical trading) we aim to determine the direction of the market and will decide when is the best time to buy or sell.   Our main aim is to determine if the value of a certain currency as compared to another one is getting stronger or weaker.   Our aim is to invest in the currency that is getting stronger.

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:

You will right-click on the graph and select Trading / New Order in the popup menu

(or press the F9 key) to activate the Order window where you will click on the Buy or Sell button to activate a trade.

Symbol = the currency combination you are going to trade

Volume = the amount of money you are going to trade with

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:

Volume 0.01 = 1,000 x 0.01 = $10.00

Volume 0.02 = 1,000 x 0.02 = $20.00

Volume 0.03 = 1,000 x 0.03 = $30.00

etc.

Volume 0.10 = 1,000 x 0.10 = $100.00

Volume 0.20 = 1,000 x 0.20 = $200.00

Volume 0.30 = 1,000 x 0.30 = $300.00

etc.

Volume 1.00 = 1,000 x 1.00 = $1,000.00

Volume 2.00 = 1,000 x 2.00 = $2,000.00

Volume 3.00 = 1,000 x 3.00 = $3,000.00

etc.

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.

Take Profit = a place where you would like the trade to be closed in a profitable situation.

If a graph is moving higher, we will activate a Buy transaction. (Blue button)

If a graph is moving lower, we will activate a Sell transaction. (Red 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) 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 saldo 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.