Trading Mechanics
Module 10 — Buy and Sell
A buy (long) profits when price rises. A sell (short) profits when price falls. Both are equally available at any moment, which is why a falling market is an opportunity rather than a problem.
Order types you will actually use
- Market order — execute now at the available price
- Buy limit — buy lower than the current price, typically at support
- Sell limit — sell higher than the current price, typically at resistance
- Buy stop / sell stop — enter only if price breaks a chosen level
- Stop loss — the price at which you accept the trade was wrong
- Take profit — the price at which you bank the result
A trade without a stop loss is not a trade. It is an open-ended exposure whose worst case you have not defined.
Key concepts
- Long positions benefit from rising price
- Short positions benefit from falling price
- Stops define invalidation
Practical example
A trader sells GBPUSD only when analysis supports pound weakness relative to the dollar.
Common mistake
Entering without a stop because the position can be closed later.
Knowledge check
Check your understanding
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