TRADING 101 – Master 4 Trading Levels

by | Nov 1, 2023

This is for my absolute beginner traders.

If you are experienced with trading, you can skip this one.

You only need to learn this once.

I’m talking about the MOST essential trading levels.

These levels not only guide your trade decisions.

They also play a pivotal role in managing risks, and maximizing profits.

And when you learn it, you will use it EVERY single damn time you take a trade.

  1. ENTRY LEVEL: Get you into your trade

WHAT?

The entry level is the price of a market on where you want to get into your trade.

Either it can be through a Market Order or a Limit order.

A Market Order will get you in at the best price the market is trading at.

A Limit Order is where you’ll choose (limit) your price to enter into your trade.

It’s crucial to identify a favorable entry point based on your strategy (technical analysis, fundamental analysis, volume analysis or sentimental analysis).

  1. STOP LOSS LEVEL: Mitigate Risk

No trade comes without risk.

That’s why you’ll need to limit your risk with a stop loss.

WHAT?

A stop loss is a protective price where you’re willing to exit a trade to prevent excessive losses.

At first, the stop loss is a set price level by a trader to limit potential losses in a trade.

However, it can also be adjusted during the trade to secure profits by moving it closer to the current market price as the trade moves in a favorable direction.

This way, it will help protect the gains and minimize the losses.  

  1. TAKE PROFIT LEVEL: Reaping the Rewards

With potential losses, come potential gains.

And the whole point of trading is to make sure we take some profits along the way.

WHAT?

A take profit level is a reward price target set by a trader to close a trade automatically at a desired profit level.

When you have a pre-defined take profit level, it will help you to lock in gains and maintain a more disciplined and unemotional approach to trading.

  1. VOLUME: Managing Risk Exposure

WHAT?

Volume is the number of CFDs a trader calculates and decides to buy or sell, to determine how much market exposure they want in order to risk a certain percentage in their trade.

Volume is the “how many”? question.

You need to determine the volume or number of CFDs (Contracts for Difference) to enter your trade.

This is crucial for effective risk and emotional management.

FINAL WORDS:

These are the starting Trading 101 terms you’ll apply each time you take a trade.

  1. ENTRY LEVEL (Buy or sell): Get you into your trade
  2. STOP LOSS LEVEL: Mitigate Risk
  3. TAKE PROFIT LEVEL: Reaping the Rewards
  4. VOLUME: Managing Risk Exposure

 

They serve as the pillars of a well-structured trading plan and will help guide you with your trading platform.

The trick now is to know where the best levels are and which have a higher probability of working out.

Trading well is about probabilities rather than certainties.

You have the starting tools.

Now what else do you want to learn next on your trading journey?

 

Trade well, live free.

Timon Rossolimos
Founder, MATI Trader

 

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Trade well, live free.

Timon Rossolimos

Founder, MATI Trader

 

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