4 Steps to Placing Trade Orders Like a Pro, Trading the London Session, Understanding Moving Averages

Happy Sunday,

Welcome to this week’s edition! We’ve packed it with valuable insights to help you trade smarter and more effectively. This week, we’re breaking down the four essential steps to placing trade orders like a pro, exploring the London session’s high liquidity and volatility, and uncovering how Moving Averages can help you identify trends and make informed trading decisions. Let’s dive in and take your trading skills to the next level!

This week’s edition:

🧠 4 Steps to Placing Trade Orders Like a Pro

📈 Trading the London Session

🚀 Understanding Moving Averages

Placing a trade may seem simple, but one mistake can be the difference between a win and a loss. To trade effectively, you need a clear plan. Here’s how to enter trade orders like a boss:

1️⃣ Define Your Entry, Stop Loss & Profit Levels

Before entering a trade, determine:
✅ Entry Point – Where you’ll enter the trade.
✅ Stop Loss – The price level that limits potential loss.
✅ Take Profit – Your target level for closing with a gain.

Stops should always be firm, whether based on charts, volatility, or time limits. Once your levels are set, check if the risk-to-reward ratio makes the trade worthwhile.

2️⃣ Use Proper Position Sizing

Risk management is key to long-term success. A general rule for new traders is risking no more than 1% of your account per trade. Using a position size calculator helps ensure your trade size aligns with your risk tolerance. Too big, and you risk blowing your account; too small, and you limit potential gains.

3️⃣ Choose the Right Order Type

Orders determine how you enter and exit trades. Common types include:
📌 Market Order – Executes immediately at the best price.
📌 Limit Order – Executes at a specified price or better.
📌 Stop Order – Becomes a market order when a set price is reached.

Advanced traders may use GTC, OCO, or OTO orders for better trade management.

4️⃣ Monitor Your Trade

Your job isn’t over once the trade is placed. Keep an eye on:
📊 Price movements – Adjust if market conditions change.
📰 Economic news – Unexpected events can impact trades.

Trading isn’t about perfection—it’s about making smart, calculated decisions. Master these four steps, and you’ll trade with confidence and consistency!

The London session is one of the most important in forex trading. Running from 8:00 AM to 5:00 PM GMT, it overlaps with both the Asian and New York sessions, creating high liquidity and strong price movements. With 43% of global forex transactions happening here, it’s no surprise that London is considered the forex capital of the world.

Key Features of the London Session

✅ High Liquidity – More trading volume means tighter spreads and lower transaction costs.
✅ Increased Volatility – Many trends start during London and often continue into the New York session.
✅ Major Currency Pairs in Focus – EUR/USD, GBP/USD, USD/JPY, and USD/CHF are the most actively traded.
✅ Midday Slowdown – Volatility tends to dip around lunchtime before picking up again as New York opens.
✅ Trend Reversals – As the session ends, traders often lock in profits, leading to potential reversals.

Best Trading Opportunities

📌 Major Pairs & News Releases – European economic data can drive strong price movements, making this session ideal for fundamental traders.
📌 JPY Crosses (EUR/JPY & GBP/JPY) – These pairs tend to be volatile, but their spreads can be wider.
📌 Breakout & Trend Trading – Many daily trends begin in London, offering opportunities for momentum traders.

Is the London Session Right for You?

If you thrive on high volatility and fast-moving markets, this session is perfect. However, if you prefer calmer conditions, you may find the London session too intense.

Master the London session, and you’ll be trading where the biggest market moves happen!

A Moving Average (MA) is a popular technical indicator that helps traders identify trends by smoothing out price fluctuations. It calculates the average price of a currency pair over a specific time period, making it easier to see whether prices are moving up, down, or sideways.

How Moving Averages Work

📌 Shorter MAs (e.g., 5-day) react faster to price changes.
📌 Longer MAs (e.g., 200-day) react slower but provide a more stable trend.
📌 MAs don’t predict trends; they confirm them after they start.

Trading Signals Using MAs

✅ Buy Signal – When the price crosses above the MA, it suggests an uptrend.
❌ Sell Signal – When the price crosses below the MA, it signals a downtrend.

Using Multiple Moving Averages

🔹 Two MAs Strategy – A buy signal occurs when a short MA (e.g., 10-day) crosses above a longer MA (e.g., 20-day). The opposite is a sell signal.
🔹 Three MAs Strategy – A strong uptrend is when the 10-day MA is above the 50-day MA, which is above the 200-day MA.

Types of Moving Averages

📊 Simple Moving Average (SMA) – A basic average of past prices.
📊 Exponential Moving Average (EMA) – Gives more weight to recent prices, making it more responsive.
📊 Weighted Moving Average (WMA) – Prioritizes recent prices even more than EMA.

Pros & Cons of MAs

✅ Helps traders follow trends with clear rules.
✅ Reduces emotional trading by removing subjectivity.
❌ Less effective in sideways markets, leading to false signals.

Moving averages are great tools for trend trading but work best when combined with other indicators for confirmation!