Tuesday, April 11, 2006

Placing The Trade On Meta-Trader 4

I thought I would post a quick description of how to enter and closeout a trade using the meta-trader 4. Also, if you scroll down, there is an interesting trade on the USDJPY.

First the trade - I like to enter my trades in this manner. We have our EUR/USD chart open and we see an opportunity unfolding. We think the price is going to rise. At the top of the screen we see the ‘New Order’ button with the green cross. Clicking on this, gives us the order placing window. Do Not enter any stop loss or take profit at this time. Click the ‘Buy’ button. Our order is confirmed and we click ok. The reason we do not enter any other info at the time of placing the order means we save valuable time and avoid the price moving from the price at which we saw the opportunity.

Right, now we can go back into our trade and modify the information to add stop losses and take profit signals. At the bottom of the screen you will see the trade you have just entered. Double click on the trade and our execution window reveals itself again. In the drop down menu select ‘Modify’. Then enter a stop loss at approximately 20-30 pips under the price we went in at. EG; if our trade is a buy order at 1.2050and we are expecting the price to rise, we would place a stop loss at 1.2020 . We do this to limit our loss if the trade goes against us. We then enter our take profit. We look at our chart and we decide the price will probably reach 1.2100 . so we place our take profit at 1.2095 to make sure we get our profit. Click on the long button to confirm. You will see on your chart that we now have three lines. A green dotted one, which is our entry price - and a red dotted one above and below the green one which are our take profit and stop loss. Now when the price reaches either of our red lines the platform will automatically close the trade.

To manually close out a trade, simply double click on the trade at the bottom of your screen. Click on ‘Close’ and the platform will exit the trade for you. You will see the proceeds from the trade reflected in your balance.

There are a couple of other options which we will explore later! But these will get you started and are a good habit to get into.

Some screenshots of a recent trade on the USDJPY

Fig 1 (Click to enlarge)

I noticed that the pair had possibly started to trade between two points on the pivot charts (more on pivots later) The blue line representing the possible top/resistance, and the pink line possible support. After seeing confirmation of the probable top with a bearish candlestick (filled in) I entered a 'Sell' order at 117.66 . Our trade proceeds to fall as expected. AsI entered four lots I decide on a reverse pyramiding technique, which is stripping half the trades in profit out as the trades progress. I strip the first two trades out at 117.47.

Following the trade down (Fig 2). I noticed a possible double bottom and, being the nervous type, closed out half the trade again at this point. 117.40 . The trade then bounced back up possibly confirming a reversal, and I closed the remaining trade at 117.47 Leaving me with a profit of 81 pips or $810

The trade actually continued down to my first estimate, but hindsight is allways 20:20 isn't it :-)

That's all for now - see you next time.


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