How To Execute A Trade

Last Updated on September 17, 2020 by Alphaex Capital

How To Execute A Trade Like An Expert

How To Execute A Trade (Accurately)

Pay close attention to this topic.

This is an art that has been lost in translation thanks to internet marketers /self-proclaimed gurus etc.

The most commonly taught method by far is the instant execution method.

This is where you open a trade as soon as the signal has been given, also known as instant execution.

This allows the trader to get in the market as soon as the signal has been identified, but the key issue here is that the candlestick has yet to fully form.

This is one of the biggest mistakes’ beginners make.

You may get a signal, but you must ensure the signal is valid.

By entering trades at instant execution of a signal would lead to more losses.

At the absolute minimum, you must wait for the candlestick to close and confirm the signal before entering a trade.

Trading after a signal on an open candlestick is risky.

We know what you are thinking, aren’t all candlesticks open?

As true as that may be; we are talking about trading on the signal candlestick.

For example, if the candlestick looks like it is forming a pattern – you must wait for the candlestick to close to confirm and validate that pattern.

Makes sense?

Alternatively, you can use the real way of executing a trade – that increases the chance of your signals being valid.

To make sure you always get the optimal entry level with every trade you take, place your order 1 pip higher than the previous candlesticks high if you want to buy – or 1 pip below the low if you want to sell.

By doing this, you will decrease the potential pips on a drawdown at entry too.

Let’s show you an example.

Here is an example of when to buy at the optimal level:

How To Execute A Trade - Buy

In this example, as you can see our signal is the green bar that appeared straight after the red after a sharp move down.

We look to take advantage of this reversal and place an order 1 pip above the high.

This allows us enough room to avoid any false signals but it also confirms the market’s intention of going higher as they have broken the previous high (which was a signal). This adds validity to our order.

Below is an example of how we would enter a bearish opportunity:

How To Execute A Trade - Low - Sell

In addition to the obvious, this will help protect your trades from potential fake signals.

One of the main arguments is that you miss out on pips if the signal has triggered and you wait.

That is very true, but what is more important – being early in the trade with a higher chance of an invalid signal or;

Waiting for an optimal trade level to enter the markets with a valid market sentiment behind it.

Can you start to see why we chose these entry points?

A quick recap to optimal trading entry levels

Buy: Place order/execute trade 1 pip above previous candlestick’s high

Sell: Place order/execute trade 1 pip below previous candlestick’s low

It’s as simple as that.

Just this little tip alone could help improve your trading and avoiding weaker signals. This is not a replacement for your trading strategy, but for your rules to execute the trade with even more accuracy.

How To Execute A Trade Quiz

Now you have been given absolute gold. It’s time to retain the information by taking our “How To Execute A Trade” quiz. This lesson you do not want to forget quickly!


What Is The Optimal Stop Loss When Buying

Correct! Wrong!

What Is The Most Common Way Taught To Execute A Trade?

Correct! Wrong!

What Is The Optimal Entry When Selling

Correct! Wrong!

Why Is This Optimal Execution?

Correct! Wrong!

What Is The Optimal Stop Loss When Selling

Correct! Wrong!

When You Have A Signal, What Must You Do First?

Correct! Wrong!

By Entering Trades Immediately On A Signal Can Lead To...?

Correct! Wrong!

What Is The Optimal Entry When Buying

Correct! Wrong!

You Should Never Trade On A [ANSWER] Candlestick?

Correct! Wrong!

What Is The Biggest Problem With Instant Execution Of Signals?

Correct! Wrong!

How To Execute A Trade: The Quiz!
Congratulations, you have passed the quiz! Please, continue to our next section to continue your learning!
Oh no! Don't worry though, you can retake the test as many times as you want. The answers are in the lesson above and it is important you get a good understanding by completing these quizzes.

Share your Results: