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Normal Forex & Crypto Trading · Chapter 6

Leverage Trading, Long/Short, Exchanges, Liquidity & Lot Size

Master leveraged trading mechanics, understand long and short positions, navigate exchanges, measure liquidity, and calculate proper position sizes — all while practicing safely.

⏱ 45–60 minutes 📘 Hands-on practice 📍 Lesson 06 of Course
⚠ Important Reminder Trading FX and crypto with leverage is high risk. Losses can exceed your deposit. Use demo/paper trading first, keep position sizes small, and never risk money you cannot afford to lose. For actual investment decisions, consult licensed financial professionals in the Philippines. Verify all platforms with BSP/SEC advisories before funding any account.

What you’ll be able to do after this lesson

  • Explain leverage, initial margin, maintenance margin, and liquidation in simple language — and show the math on a small example.
  • Differentiate long vs short positions and outline a time-based holding plan (day trade vs swing) with a written invalidation rule.
  • Describe how exchanges work (order types, maker/taker fees, funding rates for perpetuals, wallets/deposits/withdrawals, and basic due diligence in PH).
  • Measure liquidity & slippage using the order book / Depth of Market (DOM) and choose appropriate order types to reduce costs.
  • Calculate position size and lot size (forex lots; crypto contract/coin sizing) using a fixed-peso risk per trade and a stop-loss distance.
  • Use TradingView Paper Trading to practice safely before real money.

Introduction: From analysis to execution

You’ve already learned charting tools and price patterns. Chapter 6 turns that knowledge into operational discipline: right size, right order type, right venue checks. This is what helps a trader survive the learning curve and avoid “one bad trade” wiping the account. Think of this as your trading operations manual—where theory meets the mechanics of actually placing and managing trades.

Rule of thumb Use small size and paper trading until you can execute consistently (entries, SL/TP, order types, fees awareness, journaling).

Lesson roadmap

Section 1 — Leverage & Margin 101

10× leverage · liquidation
  • Understand how leverage magnifies gains and losses
  • Initial margin vs maintenance margin
  • Mark-to-market and liquidation mechanics
  • Worked example: ₱5,000 at 10× leverage

Keywords: 10× Leverage · Margin Call · Liquidation

Section 2 — Long vs Short + Invalidation

exit plan · time stop
  • Long = bullish; Short = borrow and sell first
  • Time stops and price invalidation rules
  • Stop-loss, stop-limit, and trailing stop orders

Keywords: Long/Short · Stop-Loss · Time Stop

Section 3 — How Exchanges Work

fees · wallets · PH checks
  • Order types: market, limit, stop
  • Maker vs taker fees and funding rates (perpetuals)
  • BSP VASP verification and SEC advisory checks

Keywords: Maker/Taker · Funding Rate · BSP/SEC

Section 4 — Liquidity, Depth & Slippage

DOM · execution cost
  • Reading Depth of Market (DOM) / order book
  • How market orders “walk the book” causing slippage
  • Using limit orders in thin market conditions

Keywords: DOM · Slippage · Limit Orders

Section 5 — Position Sizing & Lot Size

risk-first sizing
  • Forex lot sizes: Standard, Mini, Micro, Nano
  • Risk-first sizing formula with worked examples
  • Crypto contract sizing (USDT-margined perps)

Keywords: Lot Size · Pip Value · 1–2% Rule

Section 6 — Practice: TradingView Paper Trading

risk-free practice
  • Activate Paper Trading from the Trading Panel
  • Place limit orders with SL/TP attached
  • Log 3 simulated trades and journal results

Keywords: Paper Trading · SL/TP · Journal