Lesson 4 - How to Make a Trade?

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how to make a transaction

To open a trade in Forex, you will need a special platform (trading terminal), which is provided by the broker.

What is a trading platform?

A trading platform is a special online trading software where the trader can watch the market and make a trade. Many brokers have their own unique platforms (Oanda, for example), but the most popular and probably the best forex platform is MetaTrader 4 (MT4). You can download it here.

MT4’s merits are functionality and popularity. Ninety percent of all brokers and traders are using only MT4. Almost all Forex indicators, trading systems, and robots are designed for MT4. It is made and developed by MetaQuotes Software Corp.

Online trading platform MT4 provides the following:

  1. Stay up-to-date with live currency exchange rates
  2. Send orders (the transactions) to a broker
  3. Install your own trading systems, indicators, robots, and scripts
  4. Test robots (EA) in MT4’s strategy tester
  5. Become a provider and sell trading signals, or subscribe to copy trade operations from another experienced trader

mt4 main view

The main view of MetaTrader 4

Demo account opening and installation

In the beginning, you need to practice with a demo account. What is the difference between a real and a demo account? Read this post.

To install the platform, you have to download MetaTrader 4 and install it on your computer. Some brokers allow MT4 to be used immediately, others require you to register. For our purpose, we will open a demo account with a Roboforex broker.

Go to http://www.roboforex.com/ Click “Open demo account” and fill out the form with the requested information.

open demo account

After registration, you will get your Login and Password information. Keep it safe! Open MetaTrader 4 and go to the Navigator window. Click on Accounts with the right mouse button and choose Login to Trade Account.

Enter your login and password and press Login.

That’s it! MT4 is ready to be used, once the currency exchange rates have been updated and you can trade forex online.

How to open an order

It’s very easy. There are two ways to open an order.

First, let’s look at the fast one, the one you should use when you need to quickly open a trade.

On the left side of the chart, click on the small triangle at the top—you will see BUY and SELL buttons with lot size regulation.

The second way to open a trade is to click on the graph with the right mouse button, choose Trading and then New Order. The order box with a small graph will pop up.

how to open a trade

In the Symbol box, make sure that you are trading your desired currency pair, and in the Volume box decide your Lot Size (the number of units of the currency). Click Buy by Market or Sell by Market. Done—the transaction has been completed!

When your trade is opened, check the Trade box, and—in online mode—you can keep an eye on your profits or losses in real time. When/if your trade becomes profitable, you can close it anytime.

open a trade

In the Trade box, click on the small crosshair to close the order.

Please read the following posts:

Exercises

your homework forex

1. Let’s say you have analyzed the market and decide to buy EUR/USD for 1.3362 (price ASK). You hope that EUR/USD will reach at least 1.3400. Calculate what profit (in points) you will receive if you close the trade when the price reaches 1.3435 (BID).

2. Download the forex trading platform MetaTrader 4 and open a demo account.

3. Make a 0.5-lot-size Buy trade with GBP/USD. In the Trade box, watch the changes to the balance of your initial deposit. Close the trade after one hour and see how big your profit or loss is.

I wish you success!

Do you have any questions? Please write your questions in the comments section—we will do our best to solve them with you!

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