How to Actually Take a Trade in Forex: Step-by-Step Guide
How to Actually Take a Trade in Forex: Step-by-Step Guide
Executing a Forex trade is more than clicking buy or sell—it’s about precision and discipline. After seven years of trading and millions in profits, I’ve perfected a system to take trades that generate $1,000–$1,500 weekly in the $6.3 trillion Forex market. In this guide, I’ll walk you through how to actually take a trade using Price Action, from measuring pips to setting stop-losses and calculating risk, plus a real trade example to show it in action.
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1. Understand Pips: The Foundation of Trading
A pip (point in percentage) is the smallest unit of price movement in a currency pair, typically the fourth decimal place (e.g., 1.2000 to 1.2001 = 1 pip).
How to Measure Pips:
Definition: Pips measure price changes, like units or cents. If EUR/USD moves from 1.2000 to 1.2007, that’s 7 pips.
Using TradingView: Use the measurement tool (smiley face icon) to drag and calculate pip distances. For example, a red candlestick might span 45 pips.
Purpose: Pips determine stop-losses, take-profits, and risk-reward ratios.
Pips are your ruler for structuring trades—master them to trade like a pro.
2. Set Stop-Loss and Take-Profit with Pips
Stop-losses and take-profits define your trade’s risk and reward, measured in pips to avoid fakeouts and maximize gains.
How to Set Them:
Stop-Loss: Place 5–10 pips below support (for buys) or above resistance (for sells). For a buy at a support level, set the stop-loss 5 pips below to allow breathing room.
Take-Profit: Set at the next structure point (resistance for buys, support for sells). For example, a 10-pip stop-loss might target a 20-pip take-profit for a 1:2 ratio.
Why 5–10 Pips?: Prevents wicks or fakeouts from stopping you out prematurely.
I lost trades early due to tight stop-losses. Using 5–10 pips transformed my consistency.
3. Calculate Risk-Reward Ratio
A minimum 1:2 risk-reward ratio ensures your wins outweigh losses, even with a 50% win rate.
How to Calculate:
Ratio Explained: Risk $1 to make $2. For a 10-pip stop-loss, aim for a 20-pip take-profit.
Why It Works: If you lose 5 of 10 trades ($5 loss) but win 5 ($10 gain), you net $5 profit.
Adjusting: If the risk-reward is less than 1:2, tighten the stop-loss (e.g., 5 pips vs. 10) or extend the take-profit to the next structure point.
Mastering 1:2 risk-reward was a game-changer, delivering wins like $110,000 in a single day.
4. Determine Position Size
Position sizing ensures you risk only a small percentage of your account, calculated using pips and a position size calculator.
How to Size Your Trade:
Risk 1–2%: On a $5,000 account, risk $50–$100 per trade. You’d need 50–100 consecutive losses to blow your account—unlikely with discipline.
Use MyFXBook: For EUR/GBP with a 10-pip stop-loss and 2% risk on a $5,000 account, input the pair, USD currency, and pip value. The calculator outputs a lot size (e.g., 0.53 lots).
Execute on MetaTrader: Plug the lot size into MetaTrader 4/5 for precise risk control.
Proper sizing saved me from blowing small accounts early on, even when I was trading with just $200.
5. Use Top-Down Analysis
Analyze the market from higher to lower timeframes to confirm trends and find precise entries.
How to Perform Top-Down Analysis:
Start High: Check the weekly and daily charts for trend direction (e.g., bullish higher highs/lows).
Zoom In: Move to 4-hour, 2-hour, or 1-hour charts for entry signals like candlestick patterns (e.g., bullish engulfing at support).
Analogy: Like dressing from top to bottom (hair to shoes), start broad and get specific.
Top-down analysis ensures you trade with the trend, boosting win rates.
6. Trade During High-Volume Sessions
Execute trades during the London or New York sessions (3:00 AM–12:00 PM EST) for low spreads and high momentum.
Why It Matters:
Low Spreads: London session offers 3-pip spreads vs. 10+ in Sydney/Tokyo.
No Slippage: High volume minimizes missed stop-losses or take-profits.
Momentum: Big bank activity drives strong price moves.
Trading outside these sessions cost me thousands in spreads. London/New York trades are my bread and butter.
7. Real Trade Example: EUR/GBP London Session Trade
Here’s a Price Action trade I took, applying these principles, generating $336 in 7 minutes:
Trade: Sell EUR/GBP on a 2-hour timeframe at the London session open (3:00 AM EST).
Setup: Daily chart confirmed a bearish trend (lower highs/lows). A bearish engulfing candlestick formed at a resistance level (3+ rejections) on the 2-hour chart, identified via top-down analysis.
Entry: Used TradingView’s short position tool on a $5,000 demo account (1:50 leverage). Risked 2% ($100) with a 15-pip stop-loss (5 pips above resistance, measured with TradingView’s tool) via MyFXBook’s position size calculator (0.53 lots). Take-profit set at the next support (30 pips) for a 1:2 risk-reward. Spread was 3 pips.
Psychology: Stayed disciplined, avoiding FOMO by trading only during high-volume London session with a calculated setup.
Result: Profited $336 on MetaTrader 4, closed manually to demonstrate, shared live with my community. No slippage occurred.
Profit Screenshots: My students see results like $1,000, $2,000, even $10,000 weekly with these principles. Join my course to access these setups!
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Final Thoughts
Taking a Forex trade is about precision, discipline, and timing, generating $1,000–$1,500 weekly. Follow these steps to succeed:
Measure Pips: Use TradingView’s tool to set 5–10 pip stop-losses and structure point take-profits.
Ensure 1:2 Risk-Reward: Risk $1 to make $2 for consistent profits.
Size Positions: Risk 1–2% per trade with MyFXBook’s calculator for safe lot sizes.
Use Top-Down Analysis: Confirm trends on weekly/daily charts, enter on lower timeframes.
Trade London/New York: Low spreads and high volume maximize pip-based gains.
Ready to trade like a pro? Join my 5-Day Trading Mini-Course to learn my Price Action trading strategy and trade with a community generating massive profits weekly.
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