Make more money trading – how to enter a trade step by step

July 29, 2024July 29, 2024traderpro

In this article I’m going to explain in simple detail how to enter a trade in a margin spread betting or CFD account. I will explain how to enter a market order, set a stop loss and take profit/limit/target. I hope you find this helpful.

How to enter a trade

Entering a trade is quite simple but it should really tie up very well to your overall trading plan and strategy including your plan of managing risk. You can find articles on these on our blog here:

How to create a Trading Plan – make big wins trading

How to manage risk – make money trading

Right… getting back to how to enter a trade…if the above articles make sense to you, you can then choose to enter the market according to your strategy on your entry signal by opening up a deal ticket ‘market order’. A market order is an order which lets you enter the market immediately at whatever ‘buy’ price is displayed on your screen/chart. Let’s take a look:

First, I selected the blue ‘buy’ button. I use Trading View but you should find that your broker account is displayed/arranged in a similar way. This brings up a deal ticket and you can see the default is that it opens on the ‘market’ order tab – see the ‘Market’ heading circled and the number of units you are about to purchase. You will want to fix your stop and then control your number of units afterwards – see below. This is so that you can fix the amount you lose on each trade to be exactly the same, regardless of market and trade set up. I produced a video explaining this on Patreon, here:

https://www.patreon.com/posts/how-to-control-104741853?utm_medium=clipboard_copy&utm_source=copyLink&utm_campaign=postshare_creator&utm_content=join_link

How to set a stop and limit/take profit

As stated above, it’s best to set a stop loss first. You should be aware of what ‘price’ you want your trade to exit the market at, should it go against you. See the section above on how to enter a trade. You can add this ‘price’ level to the trading view platform in the stop loss ‘price’ box, here:

In the above screen shot you can see that the ‘price’ level option is available for you to input a number. What you might find with some brokers, however, is that you need to choose an arbitrary ‘points away’ value and then adjust this on the chart by pulling the stop up or down on the chat, until it reaches the correct price according to your trade set up/strategy and plan. This was explained in my video on Patreon linked here:

https://www.patreon.com/posts/how-to-control-104741853?utm_medium=clipboard_copy&utm_source=copyLink&utm_campaign=postshare_creator&utm_content=join_link

Once you have set your stop price, you should be controlling the ‘quantity’/number of portions of the market you want to open. This should be etched up or down until you get to the required stop loss ‘value’:

In this example, I have controlled the number of portions to be such that the value I lose on the above deal ticket would be no more than £100. Note that this is not always perfect – you cannot always fix it exactly to the number you want. The closest I could get this on this example was £101.23 rather than £100. This is ok – such a small difference in stop value will not have an impact on your win rate or the success overall, of the strategy.

Once you have set your stop loss and chosen the quantity, you can then set your limit in terms of price. As with the stop, some brokers will force you to choose a ‘points away’ value and then you may need to adjust this line on the chart to pull your limit/take profit target to the correct position.

Once your stop, quantity and limit have been set, you are good to go, and you can just click buy/enter.

I hope all of the above makes sense, and it’s clear how to enter a trade, but if you are stuck, please do reach out and I would be glad to help!

Entering the market at a chosen price

You can also enter a trade with a ‘limit’ order at a specific price. This will allow you to only enter the market at a given price, and if the market does not reach this required price, you will not enter. This will be exactly the same as the steps above but you will start by entering the ‘price’ at which you wish to enter the market, on a ‘Limit Order’ ticket, into the relevant box:

Once you have chosen the limit order and entered your limit price, the other steps will be the same as above for a market order.

I hope you found this article helpful.

For more great tips and advice on trading the stock market, please visit:

https://trader-pro.co.uk

To watch me trade live please visit my Patreon page here:

https://www.patreon.com/Traderpro8320

Finally, if you would like to receive a discount on the Trading View charting software I use, please click on the relevant link here:

https://www.tradingview.com/?aff_id=117138

Please note any subscriptions taken via my affiliate link with Trading View may result in me earning a small commission. However, I provide complete transparency on me using Trading View personally – I publish my success on the financial markets via my broker reports and any profits earned were done so by using my own Trading View subscription, so I genuinely do recommend them and have been using the Trading View charts for many years.

How to control emotion when trading to make more money

July 9, 2024July 11, 2024traderpro

In this article we discuss how a stock market trader can control emotion when trading. Trading can be very emotional but we provide the secrets on how to control emotion while trading, and these secrets are absolutely critical to becoming a successful stock market trader.

How to control emotion when trading – which emotions are at play?

The stock market is driven, basically, by a whole boat load of people placing orders to buy or sell. These people are filled with emotion but two emotions in particular are at play, when trading. The emotions at play are FEAR and GREED. Here are some examples of how the emotions of fear and greed can affect a trader when s/he is trading:

When entering a trade, the trader can get in too early (greed);
When exiting a trade, the trader can exit too late (greed);
When entering a trade the trader can miss out on the entry (fear);
When entering a trade, the trader can close too early (fear);
When looking for a market to enter, the trader can ‘stretch’ their entry criteria to markets which do not really meet the original criteria thereby allowing the trader to enter trades on markets they wouldn’t have entered without the emotion attached (greed);
When the trader has taken a few losses in a row, the trader can become fearful of the next trade and this can affect logical decision making (fear);
When the trader has taken a few profits in a row the trader could become complacent and start ‘overtrading’ (greed).

As you can see, there are a number of scenarios where the trader can be affected by these two emtions. So how do traders control emotion when trading?

How to control emotion when trading (fear and greed) – which trades to place?

The first step in how to control emotion when trading, which every new trader should be aware of is that he/she should be looking to place the same types of trades over, and over and over again. Types might include breakout trades, buy the dip etc. By placing the same types of trades over and over, the trader will slowly but surely develop confidence in his/her strategy, or be clear that what the trader is doing, is not working statistically. The trader will be acquiring very unique statistical data to do with the trader’s own personal trading style. S/he can gather information about how many losses or profits to expect in a row before it switches the other way – thereby keeping the trader calm when they know in the long run, the strategy is profitable overall. (If the strategy turns out to be unprofitable, keeping statistical data gathered on the same types of trades empowers the trader to acknowledge, accept and move on from something which is undeniably, not working – perhaps to try a different approach -but this should only be done when the particular strategy has been given a fair chance). A trader should look to place 30 + trades on a particular strategy to see the win rate. The win rate can fluctuate wildly at the outset because the population of trades is not large enough for the win rate to have any meaning. The writer has found that after about 30 trades this starts to settle down and with 100 trades the trader can really be sure of the win rate of what he/she is doing.

Second but just as important – Risk Management!

Another crucial step to controlling emotion when trading is to practice good risk management. We have provided a key article here on this:

How to manage risk – make money trading

A trader will find that if they are controlling risk effectively, this effectively keeps their emotions more ‘caged’ than the scenario where risk is not being managed effectively. For eg. when combined with the point above about placing the same types of trades and understanding the strategy being applied on a statistical basis, when the risk on each trade is low, the trader will not be worried about taking four losses in a row in the same way they would if they were risking half of their capital balance on each trade! They would soon be out of the game in this second scenario and would probably give up and start smashing their computer (not unheard of in the writer’s experience).

The writer believes these two single items can help any trader manage their emotions successfully. We hope you found this article helpful.

For more great tips and advice on trading the stock market, please visit:

https://trader-pro.co.uk

To watch me trade live please visit my patreon page here:

https://www.patreon.com/Traderpro8320

Finally, if you would like to receive a discount on the Trading View charting software I use, please click on the relevant link here:

https://www.tradingview.com/?aff_id=117138

I made the most terrifying mistake trading this month!

July 1, 2024July 11, 2024traderpro

This month I made the biggest mistake trading – of my life. It’s a mistake I have learned from and one which I never, ever want to repeat. I failed to close a position when it was going against me. This was literally the most costly mistake I’ve ever made and i’ve never had suck a lack of discipline in my trading previously. I explain below.

Biggest mistake trading – EUR/JPY

I entered this market obviously with a view to making a profit. The trade went against me but it moved so quickly that I lost my discipline and control at the point where it was at my stop loss level. I usually close trades manually and I still am minded to continue this practice because it usually allows me to analyse what’s going on at the time, under a microscope, so as to not close trades prematurely. However, on this occasion, the EUR/JPY price sailed down so fast I was not thinking clearly and as it went further against me, it was even more difficult to close. I’m sharing below the point where I was sitting in the trade per the 30m timeframe. I exited the trade somewhere on it’s way back up after sitting there watching it until 3am… I had initially thought it was recovering but then the huge green candle formed with the enormous bottom wick, seen below. It was here I exited the trade because I had no idea where the price would end up and doing some analysis on the daily timeframe, I decided the price had the potential to soar down to the EMA line on daily timeframe, and this would have put me into the red for a value which would have represented about 75% of my entire trading capital balance! I felt obliged to close the trade on that large green candle. I felt relieved once the trade was closed.

You will see below that the price did in fact recover which is frustrating for any trader to note, following a loss – but especially following a particularly large loss! However, any decisions we make are ‘in the moment’ – we do not have a crystal ball.

What did it cost me?

This mistake cost me 10% of my trading capital balance. It was a very costly mistake. It should have merely cost me 1% which is my usual loss tolerance. However, it could have been worse and as I said above, I was filled with relief once I had closed the position. It has set me back in my overall growth plan for my trading account.

The lesson which has been learned by me

After this experience, I will never, ever, hold a position open again when it has moved against me and reached my pre-planned stop level. I also learnt something about myself – that I am capable of momentary lapses of discipline. As traders we need to learn from these mistakes, forgive ourselves and plan how to move forward effectively. Trading is very emotional and we are not algorithms. Trading can be affected at any one moment by personal circumstances or worries/concerns completley unrelated to trading. Even hormones can affect the way someone behaves on a given day. I am usually a very disciplined trader and I am disciplined in many different aspects of my life so I really did surprise myself this month – but knowing this was out of character, I am confident that I will never allow this to happen again. It was completely counterproductive – it will take me about two months to catch up and get back to the account size I would have been at, had I not made the error.

I am now forgiving myself and moving forward.

I hope you found this blog post helpful and it helps someone else to avoid losing money/perhaps it will help someone else to have the courage to close a position when things have gone badly wrong!

For more great tips and advice on trading the stock market, please visit:

https://trader-pro.co.uk

To watch me trade live please visit my patreon page here:

https://www.patreon.com/Traderpro8320

Finally, if you would like to receive a discount on the Trading View charting software I use, please click on the relevant link here:

https://www.tradingview.com/?aff_id=117138

New traders fail to make money – WHY?

June 26, 2024July 11, 2024traderpro

In this article I discuss why most traders fail to make money on the stock market. The percentages of people who succeed against those who fail are striking – some brokers report it can be as low as just 3 – 5% of people succeeding. In this article we take a look at some of the key reasons people fail to make money in trading the stock market.

#1 Reason traders fail to make money – risk management

New traders probably get sick of hearing about risk management but it really is critical to success. That is why we have listed this as the number one reason new traders fail to make money. Many of them tend to have poor risk management and they blow up their account within a few trades. Experienced traders know very well that in order to asssess whether a strategy is working or not, you would need to place in excess of 30 trades but probably more like 100 trades, and that even good traders can take four losses in a row before going back to making profit. So how does this affect a new trader? Some new traders will risk half of their account size (or the whole thing) on their first few trades… what if they get four losses in a row at this point? They may decide that the strategy doesn’t work, their broker is a crook, etc etc. They will have run out of money and they give up. It is essential to have a great plan in place for risk management. Luckily for you, you can get information about what this may look like, here:

https://trader-pro.co.uk/category/risk-management

# 2 – Reasons traders fail to make money – not accepting a loss

This is the second reason we have listed for new traders failing to make money in the stock market. They do not have the discipline to close trades when they are going against them. Probably the single item which distinguises a trader from an investor is that traders tend to cut off losses quickly and allow the ‘good seeds’ to grow. This results in far more profit than can be made by holding on to bad positions. However, the new trader is afraid, and does not close losses quickly enough. This can result in his/her losses amounting to more than the profits made or if they have not closed the trade at all, their margin requirement is now blocking them from placing further trades on what would be profitable positions elsewhere…They have in their heads visions of themselves driving Ferraris a few weeks after starting their trading learning journey!

# 3 – Getting into wrong trades and placing too many trades

I’ve put these two together because they are related to each other… new traders tend to place a lot of trades on bad positions. They are still learning, and they haven’t yet discovered how much patience and waiting is in fact involved in becoming a consistently profitable trader. They have in their minds, movies about wall street and people shouting “buy buy buy” and they enter the markets over and over again in what I refer to as a ‘new trader frenzie’. They do not do their technical analysis properly prior to entering each position and they are ‘rushing’ to make money rather than rushing to ‘learn’ how to trade.

# 4 – Not sticking to one type of strategy

New traders tend to place lots of different types of trades including breakouts, buying the dip, shorting the markets – these are all great ideas but they do not get to a point where they understand their statistical success rates. They have no idea how successful each thing is before moving on to the next one! Successful traders understand you need to place 30 – 100 trades on one type of strategy to understand how that strategy is performing. Constantly switching will not give the new trader the information they need. They will have no idea how many profits or losses in a row to expect because by the time they have received one loss, they have canned that strategy and started trying something new. Consistency and patience is key in becoming successful. There is another point to this which is extremely important – the new trader does not become better with practice as they would by sticking to the same strategy because their mind is all over the place and they don’t remember or start to learn, what to look for when entering a ‘buy the dip’ – they have switched strategy before noticing anything about the profit or loss they just made on the prior ‘buy the dip’ trade.

I hope you found this article helpful. If you are a new trader and you would like some guidance on how to get started in a profitable consistent way, please see the article we published here, about how you can work towards making £100 per day:

How to make £100 per day

For more great tips and advice on trading the stock market, please visit:

https://trader-pro.co.uk

To watch me trade live please visit my patreon page here:

https://www.patreon.com/Traderpro8320

Finally, if you would like to receive a discount on the Trading View charting software I use, please click on the relevant link here:

https://www.tradingview.com/?aff_id=117138

Risk Management – setting a stop loss? How to make money

April 23, 2024July 22, 2024traderpro

In this article we talk about one of the popular methods of managing risk – setting a stop loss. We talk about how to set it up, when it’s useful but also the disadvantages of using one. We hope you find this useful.

What is a stop loss?

A stop loss is a setting you can apply to your trading account to ‘automatically’ sell the holding when it gets to a particular price level. (You can also sell a portion at a particular price using limit orders, but that is not covered in this article). The stop loss is used to control and limit the risk of a trade. The set up is typically done at the outset of placing the trade. It therefore removes the emotion involved in making a decision at a point when a trade is going against the trader. Stop losses are not guaranteed unless a ‘guaranteed’ stop loss is used, for which an additional premium will likely be payable.

The stop loss can be set from any platform but also Trading View – the charting software we are using.

Typically traders have an idea of where to get in and out of a trade in the event it goes for or against them. The stop loss can therefore be set to coincide with this initial decision.

Advantages

A stop loss removes the emotion of making a decision at a point in time where the markets are against you and you feel stressed and fearful of losing money;
It can be set up at the outset of placing the trade to coincide with the overall plan for the particular trade – and it assists traders in ‘sticking to the plan’;
It will activate when the trader is offline – so if trades are being held overnight, the stop loss will trigger in the event the price starts trending against the trader and it’s reached the trader’s limit.
They are usually quite accurate in terms of where the market sells – they are usually close to or on the stop loss so it really does help to limit risk on trades placed.
A stop can be ‘trailed’ to follow a long trend while leaving the position with room to breath. Please see our other blog articles on the best way to approach this. This will allow the trader to take advantage of profit already on the table and allow the trade to grow even more by always moving the stop to a sensible distance away from current price.
It can be a great way to stick to an overall trading plan for your account by executing small trades and strictly applying a stop when they go against you. See our other blog articles on risk management and position size.

Disadvantages

There are some draw backs to setting a stop loss and these, in the writer’s opinion, should be balanced carefully with the advantages listed above. We have listed some disadvantages below:

The emotion in deciding where to sell is removed. Whilst this can be a good thing, for someone who is learning, trading is very much about discipline and closing positions when they are going against you helps you to build strength and discipline in your trading style. It also forces the trader to ‘focus’ very carefully on what is happening in the market at the time of either closing, or not! For example, is the price making lower lows and lower highs now, or is it consolidating or something else? What is the reason for closing based on the patterns the trader can see on screen? When a stop is set, all of this thinking and learning is removed.
The stop will not always be placed in the ‘best place’… what I mean by this, is that the markets tend to stretch to a particular point and test that point/extreme and then they rebound in the other direction. At the outset of the trade, the trader will not necessarily know where this is. The trade will close with the stop at the ‘arbitrary’ point set at the outset. This may be based on the previous low, but what if the candles go slighly lower than this on a long position, but the point they reach is still higher than the previous low (so the market is still uptrending)? A stop will cause a trader to get out of a trade prematurely/incorrectly.

How to set a stop loss

We have explained how to set a stop loss with the charting platform ‘Trading View’. Please note by signing up through the link below you will receive a unique discount:

https://www.tradingview.com/?aff_id=117138&source=TraderProBlog

However, please also note that as stated above, the stop can be set on any platform.

In Trading View, when placing an order to buy, you would have clikced on the ‘buy’ button here:

Next, you will see the following screen:

You would need to decide, based on your trade set up at the oustset, where you think you would sell in the event the market goes against you, or in your favour. We can help you learn how to make this decision at other articles posted on our blog:

Trader Pro – Trading strategies for success in the financial markets (trader-pro.co.uk)

Click the box next to ‘stop loss’ and enter the price at which you wish to sell in the Price box. You can, at the same time, set a ‘take profit’ price in the same way.

Once your stop is set, it will show on your trading view chart as a red horizontal line with the loss value attached. This can be moved easily (although this is not encouraged unless you are trailing a stop or following a long trend!).

Does Trader Pro use a stop loss?

The golden question… the answer to this is no, not now. I feel like my trading improved tenfold when I decided to stop using a stop loss, for the reason listed above related to ‘learning’ from what is happening on screen and not allowing the software to close the trade for you at an arbitrary amount. The person responsible for Trader Pro has got a lot of discipline, however, and this can be something which is genetic and which a person can posess even from a young age. Trading without a stop loss, where the trader has got little to no discipline is not enouraged and could be dangerous.

We hope you enjoyed this article. You may find it helpful to use it in conjunction with our other blog posts on risk management for an overall trading strategy.

For more great tips and advice on trading the stock market, please visit:https://trader-pro.co.uk/To watch me trade live please visit my patreon page here:https://www.patreon.com/Traderpro8320Finally, if you would like to receive a discount on the Trading View
charting software I use, please click on the relevant link here:https://www.tradingview.com/?aff_id=117138Please note any subscriptions taken via my affiliate link with Trading View may result in me earning a small commission. However, I provide complete transparency on me using Trading View personally – I publish my success on the financial markets via my broker reports and any profits earned were done so by using my own Trading View subscription, so I genuinely do recommend them and have been using the Trading View charts for many years.

How to manage risk – make money trading

April 23, 2024July 22, 2024traderpro

In this article I will help you understand how to manage risk when trading the financial markets. I will share what I do to manage risk, in my personal trading, to achieve a 60% win rate with a 1.5:1 reward/risk ratio. Managing risk is possibly the most important part of learning how to trade. You will require extreme levels of discipline. Without successful risk management you will not be profitable. I hope you enojoy this article and you find it helpful.

What does it mean to manage risk?

To manage risk means you are controlling your losses in such a way that your trading style is sustainable. If you place 100% of your capital balance on one trade and it goes against you with no stop loss, this is clearly not sustainable. This is an extreme illustration but the successful traders will have a plan in place of what they consider to be the sweet spot in terms of the amount they risk on each trade versus their overall capital balance, taking into account the win rate and reward/risk ratio they are achieving.

Illustration of how you might be able to manage risk in your trading

Lets say you have an account balance of £10,000. The best advice I can give is for you to divide this balance by 100 and only risk £100 on each trade position and to keep this strictly consistent. Why? Because there are times when you may end up with a few losses in a row, and such a small amount out of your capital balance will not be felt by you and will not end up causing you to be discouraged. When you are trading, you want your emotions to feel calm and controlled. If you are only risking 1% of your capital balance, your emotions will not get into the way of decision making (to either close a trade or take a profit for example). Also you need this to be consistent so that your win rate makes sense. If you make 1.5 x your risk on profitable trades, you don’t want this to be erratic in terms of the amount risked. It is better for you to always make £100 loss on losing trades and then £150 profit on wining trades.

Practical examples – how to manage risk

So lets say, you follow my advice and only risk £100 per trade… you will want to cut your losses on trades which are going against you, at the value of £100. How can you control the trade in this way?

If you are trading with a margin account…

If you are trading with a margin account, you would control the ‘position size’ such that the loss ends up being £100 at a certain level. Let’s look at a practical example:

I use Trading View to look at charts and execute orders. In the above screen print, you can see a limit order ticket. You can also see a similar ticket on a ‘buy’ order. Take a look, also, at the red and green rectangular shapes I have added to the chart. These shapes indicate the entry point, loss point and profit target of a trade with a 1.5:1 reward risk ratio.

You can see in the ‘units’ box of the buy ticket, that I have controlled the number of units being purchased in the market to end up with a £100 loss in the stop loss column. The profit is set to £150.

This is literally how I execute my trades every time I enter the market.

If you are trading by purchasing actual stocks without margin

If you are not trading with a margin account, you can control your position size in a similar way to achieve the same result of ‘restricting’ your loss to £100 per trade. Lets say you want to get into the same market in a normal share purchase account (Google Class C). You can open one of these accounts with Etoro as an example. I do not have any affiliation with Etoro (just for your info). The entry price per Etoro currently is $156.07. The difference between the margin trading price and the Etoro share purchase price is the spread – this is explained in a separate article but you need not worry about it here if you are not using margin. Lets say the stop loss level on your chart is at a price of $148.67 (taken from the same chart screen shot above – the price level at the bottom of the ‘red zone’). (To understand where to set your stop loss level please see our other blog articles on creating a trading plan and managing risk. The placement of the stop in the screen shot is not in any way indicative of where you should place your stop generally – this discussion is just to illustrate the calculations of restricting your loss). Let’s also say you will take your profit when the price reaches $164.64 (taken from the top of the green zone on the chart picture above – again, there will be a ‘spread’ difference on price here).

Now, in order to control the value of your loss, you would need to calculate how many shares to buy in this market based on the stop loss price level. I have provided you with a simple calculation to achieve this when not using a margin account:

Please note the FX rate used is just a rough guide – it is not accurate.

So if you want to risk £100 per trade on this Google market, you would need to purchase 16.22 shares. If you want to risk £15 per trade, you would need to purchase 2.43 shares.

When restricting your losses to the same amount each time, you can control your risk. Your trading will feel comfortable and under control. You are unlikely to make more than about 4 or 5 losses in a row so your account could dip by £500 at any one time, when risking £100 per trade (out of a total balance of £10,000 (10,000/100 = £100)) or your account could dip by £75 when risking £15 per trade, and your total account size is £1,500.

How many entries on the market should you open at once?

For me, I restrict this to 3… but really I aim for one. The reason I have three open at once sometimes is because I am running some ‘funds’ within my capital / trading to either accumulate or pay for certain things within my lifestyle. This is the reason you will see me close three positions of the exact same market and size sometimes within my Patreon live trading demonstrations. However, the rule is generally to have one open at a time.

In applying this risk management, and with the correct trading strategy (please see my Patreon page to learn how to achieve a 60% win rate with a 1.5:1 reward risk ratio here:

https://www.patreon.com/Traderpro8320

you can control your risk and watch your profits and account size slowly grow.

I hope you enjoyed this article.

For more great tips and advice on trading the stock market, please visit:

https://trader-pro.co.uk/

To watch me trade live please visit my patreon page here:

https://www.patreon.com/Traderpro8320

Finally, if you would like to receive a discount on the Trading View charting software I use, please click on the relevant link here:

https://www.tradingview.com/?aff_id=117138