Okay, so in the last lecture, we learned all about the importance of building a trading plan or a trading idea. Now, when that trading plan idea comes to fruition, it's all about the final piece of the puzzle, which is executing the trade, knowing how we get in how we protect ourselves, and how we profit from that trade. So let's go through that. So first and foremost, really, the execution of the trade should be the easy bit because the hard work comes prior to that in terms of your proactive approach to building a trading plan, and a trading idea. Now it's absolutely essential that you only are ever executing a trade once your trade plan or idea comes to fruition. If it doesn't, and the economic news event that you're watching actually does the opposite to what you want to have happen.

We do not take the trade. However, once it does, I eat The news supports your trading idea. As soon as that news is released, and we've digested it, the execution is pretty straightforward. All you're doing is you're getting into the trade as soon as possible. Remember, speed is of major importance when trading the news. And this is why it's key, as we've already mentioned in the resource section to have a fast news feed.

So your score can your news gun, and also a broker with fast execution and low spreads. So you can get into the market very efficiently and quickly to maximize your gains. And really, when your trade plan is spot on, and the new supports your trade plan, the move should really just go in a one directional nature. So the key thing is the sooner you get in, the better. But let's go through the components of a trade there are three, you have your entry, where to get in and how to get in your stop loss, which is going to protect the downside of a trade which doesn't quite work out and your target which is your profit objective. So firstly entry as we know, this will be a live market order or instant execution.

I'll talk you through that when I go through the broker platform in a separate video. And we're looking to get into that trade as soon as the news is released and it meets your preset criteria, ie your trade plan comes together. Now when we're in a trade, we obviously want to protect the downside and risk manage. And I'll go through this in a bit more detail in the risk management section. But stop loss is simply an order to exit a trade for a predetermined loss if the trade doesn't quite work out. What we're going to do is we're going to use a fixed stop loss of 80 pips from the entry price that you get in every single time.

And this is really the main reason for this is it gives the trade sufficient room to breathe, ie when news comes out it can get quite volatile initially. So what we don't want to do is get stopped out quickly to then Miss On the bigger move than we had anticipated, so we give it 80 pips to breed I'm not expecting many of your trades to hit the 80 pips stop loss. However, we do need to give it enough room to allow that trade to come to fruition. Another ideal nature of add is using a fixed stop loss every single time it makes our risk management easier and more importantly quicker to work out and you'll see this in the risk management section. But the last thing we want to be doing is spending three to five minutes working out our risk management and missing out on the majority of the move, we will be able to calculate our risk management before we take the trade so it is literally a matter of listening to the news.

If it works out. You will click into the trade because you'll have already worked out your risk management and you'll know how much to in regards to your trade size to take on the trade. And then finally is your target. This is the the the Most important element This is where we really want to be to be maximizing our gains initially, we're going to use a one to one reward to risk ratio so we know that we're risking 80 pips. So we're going to look to make 80 pips on a trade. Now trying to decide on where to take your profits as a news based trader is very very tricky because some news events will absolutely fly and go 300 400 pips whilst others will only go 150 for example, so we're going to use 80 pips to make sure that we're taking an initial part of the move, because we want to have a high success rate in the early days, because that's going to do wonders for our confidence.

So we're going to take an initial part of the move by by looking to make 80 pips what we'll do later down the line is I will give you some several discretionary elements and variables on how to take your profit. But the last thing I want to do now is complicate things by giving you three or four ways to To find a target, I just want to give you one so you can get up and running. You can. It's very, very black and white. It's very straightforward. And you can build your experience using this scenario.

And then later down the line, once you've got confidence and you've seen yourself really master the skills of trading the news, then I can give you several discretionary ways of exiting a trade which I personally do use. Not every single trade I take is a one to one. But that's initially what I want you to go with, just as you're building up your experience and then later down the line. I'll give you some discretionary elements in regards to different ways of exiting a trade, but initially, we'll go with a one to one so let's make that more visible because it's easier to understand when we use a chart. So here we have an example of a by trade. So using the pound Ozzy by trade from from earlier execution took place a few seconds after the 930 news as highlighted by the blue square, the horizontal blue line above was the executed level at 2.0683.

So this was me essentially at my charts listening to the squawk and the Forex news good. As soon as I heard it, the news came out better it my trade plan came together and I clicked into the market as quickly as possible. Now once I'm in a trade obviously want to be protecting the potential downside because no trade is guaranteed. So I always want to protect the potential downside. So what does that mean? It means I need to put my stop loss on.

So where do I put that? I put my stop loss 80 pips below the market execution price. Remember, it's a buy trade. So we want the market to go up if it starts going down. That's obviously a concern to us. And that's where we want to have our stop loss.

So we put our stop loss 80 pips below the market execution price, which in this example, is 2.0603 as illustrated by the red line, giving it enough room to breathe, to fulfill its potential. And then finally, once we're in a Trade and trade pain comes together more often than not, the trade will just go won't really look back, it will just keep going in the intended direction. So we want to have an idea of where we want to take profits. So initially, we're going to go with a take profit of 80 pips up above our execution price in a buy trade example because remember, if the market goes up, we got our speculation correct. And that's where we'll start to make money. So our profit objective is 80 pips above our initial entry order, which is at 2.0763, as illustrated by the orange line.

So as you can see here, we've got a clear one to one we executed at the blue line. Our stop is 80 pips below our target is 80 pips above giving us a reward, profit objective, to risk of one to one. And the great thing about news based trading is we're not having to use any technicals. It's literally we're getting in or fresh information, and we're letting the market Momentum drivers to a profit objective. We're not using technicals, we're not having to complicate ourselves with Fibonacci or simplicity or high test and low test. It's literally fresh information, fresh reason for the market to buy pounds and sell Ozzie dollars to create this market momentum to the upside.

Okay, what about sell trade just need to flip things the other way around. So I've got an example here selling New Zealand dollar after the interest rate cut on June 10 2015. We have looked at this before and the reason why I'm using it again, is just to give some consistency to what we're doing. There are loads more example videos in the curriculum that you can have a look at as well. But for continuity reasons I'm using an example that we looked at earlier. Okay, so he criteria for a sell trade and its market execution you're looking to get in as soon as possible.

So this was based off the the rate decision from New Zealand which took place at 22 00 or 10 o'clock, London time. What happened as we can see here is on the blue square this was the the hourly candle that took place as soon as that news announcement came out, I got into the trade this was the earliest opportunity I could get in. And the main reason for that is because it took me by surprise, it wasn't actually as prepared as I should have been just to show you that we can sometimes we can sometimes lakhs and not do not take the professional approach. I was actually not buying my charts and I had to quickly get to my chart so I didn't get the best execution price on this I should have got in a little bit higher up. And that's why what I mentioned before, when you've got it, you should be prepared 20 minutes before a news event.

That's really really important because I missed out on a good 3040 pips here by simply not being prepared. However, I did eventually get in because I still felt that because they'd cut rates that the kiwi was gonna weaken significantly against the dollar. So I executed at 7080 as illustrated by the blue horizontal Line stoploss goes in 80 pips above the market execution price, as illustrated by the red line. Remember, we're selling now. So we want to see the market fall. If it starts to go up, it's a concern.

So we always have our stop above where we got in. The price that we put our stop loss in this example is 7160, as illustrated by the red line, and then finally want to be thinking about a profit objective. So our take profit order, go in 80 pips below the market execution price, because we want the market to fall. If it falls, we are rewarded with a profit for getting that speculation. Correct. And that price was at 7000 as illustrated by the orange line again illustrating that one to one reward to risk ratio.

So a very simple way of entering, putting your stop loss on and putting it on again, because I want the the execution to be very, very easy bit. The Hobbit comes in terms of your trade plan, but when your trade plan comes together, More often than not, you will get a very nice move in your intended direction. But no trade is guaranteed. So we'll always always use a stop loss, but more often than not, it will go on and realize you a nice profit of around 80 pips