Learn exactly when to enter, where to place your stop loss, and when to take profit. Real examples using the XM trading interface with EUR/USD.
A hands-on guide to executing trades properly — from analysis to order placement.
Buy low, sell high — both directions
⏱️ 8 min readMicro lots for beginners
⏱️ 6 min readStep-by-step order placement
⏱️ 10 min readComplete setups with SL & TP
⏱️ 15 min readWhat to avoid
⏱️ 5 min readBefore every trade
📋 ReferenceIn Forex trading, you can profit whether the market goes UP or DOWN. This is because you're always trading currency pairs — when one goes up, the other goes down relative to it.
For EUR/USD: The first currency (EUR) is the "base" and the second (USD) is the "quote". The price tells you how many USD you need to buy 1 EUR.
You BUY EUR/USD expecting the price to go UP. You profit when the Euro strengthens against the Dollar.
You SELL EUR/USD expecting the price to go DOWN. You profit when the Euro weakens against the Dollar.
When should you enter a trade?
Click to revealEnter when your analysis confirms a setup: price at support/resistance, pattern breakout, or indicator signal. Never enter "just because" — have a clear reason.
What is a stop loss for?
Click to revealA stop loss automatically closes your trade at a set price to LIMIT YOUR LOSS. It protects you if the market moves against you. ALWAYS use one!
What is a take profit for?
Click to revealA take profit automatically closes your trade at a set price to LOCK IN PROFIT. It ensures you don't give back gains if the market reverses.
A "lot" is the unit of measurement for trade size in Forex. The lot size you choose determines how much money you make or lose per pip of movement.
For beginners, micro lots are the safest way to learn because they minimize risk while you develop your skills.
With micro lots, even a 100-pip loss only costs you $10. This lets you make mistakes and learn from them without blowing up your account. You can practice real trading psychology without the fear of significant losses.
Many brokers like XM allow you to open accounts with as little as $5-$100. With micro lots, you can trade properly with proper position sizing even on a $100 account. This is impossible with standard lots.
The standard rule is to risk only 1-2% of your account per trade. With a $100 account: 1% = $1 risk. With micro lots ($0.10/pip), you can set a 10-pip stop loss and only risk $1. This is proper risk management!
Let's walk through exactly how to place a trade on XM's platform. This interface is similar to most Forex brokers, so these skills transfer.
Based on your analysis, decide if you want to go LONG (BUY) because you expect price to rise, or SHORT (SELL) because you expect price to fall. Click the corresponding tab.
For beginners, start with 0.01 lots (micro lot). This means each pip = $0.10. Use the +/- buttons to adjust. Never risk more than 1-2% of your account on a single trade.
Enable the Stop Loss checkbox and enter the price where you want to exit if wrong. Place it below support (for longs) or above resistance (for shorts). This protects your account!
Enable the Take Profit checkbox and enter your target price. Aim for at least 1:2 risk:reward (if risking 30 pips, target 60 pips). This ensures profitable trades outweigh losses.
Check the order summary: risk amount, potential profit, and risk:reward ratio. If everything looks good, click the BUY or SELL button to execute your trade.
Buying at a key support level
Selling at a key resistance level
Buying the breakout above resistance
Complete this checklist BEFORE every trade:
LONG (BUY): You profit when price goes UP. SHORT (SELL): You profit when price goes DOWN.
Micro lots (0.01) = $0.10 per pip. Perfect for beginners to learn with minimal risk.
ALWAYS use a stop loss. It protects your account when you're wrong. No exceptions!
Aim for 1:2 risk:reward minimum. If risking 30 pips, target at least 60 pips profit.
Risk only 1-2% per trade. With a $100 account, risk max $1-2 per trade.
Have a clear reason for every trade. Support bounce, resistance rejection, pattern breakout, etc.
This content is for educational purposes only and should not be considered financial advice. Forex trading involves substantial risk of loss and is not suitable for all investors. The examples shown are for illustration only — past performance does not guarantee future results. Always practice on a demo account first.