Cheat sheet
Placing your first trade cheat sheet
The key points from the Placing Your First Trade path on a single page. Use it as a quick reference at the chart. It is educational and general in nature, not investment advice.
Order types
- Market order: fills now at the best available price, so execution is certain but the exact price is not (slippage).
- Pending order: waits for a price you set in advance, and can be cancelled while it waits.
- Limit orders wait for price to come back to a better level; stop orders wait for price to push through a level.
- Buy limit sits below price, sell limit above, buy stop above, sell stop below.
Reading candlesticks
- Each candle shows four prices: open, high, low and close (OHLC).
- The body spans the open and the close; the wicks reach out to the high and the low.
- A close above the open is bullish; a close below the open is bearish.
- The timeframe sets how much trading each candle covers.
Support and resistance
- Support: a lower area where buying has slowed declines, like a floor.
- Resistance: an upper area where selling has capped advances, like a ceiling.
- Treat them as zones rather than exact lines.
- A broken level can switch roles: former resistance can begin to act as support.
Stops and targets
- A stop-loss closes a trade to cap the loss once price reaches a level you set.
- A take-profit closes a trade to secure a gain at a target you set.
- Set both before you enter, while you are calm.
- Many traders place them around market structure rather than round numbers.
Position sizing
- The distance from entry to stop-loss is the loss accepted if the level breaks.
- Position size is chosen so that loss stays within a limit you set in advance.
- Pip value times the stop distance times the size gives the money at risk.
Educational and general in nature, not investment advice or a personal recommendation. Trading carries risk to your capital.