Your First Trade

You know what pips, lots, leverage and orders are. Now it is time to put them together and place a trade, from start to finish, on a demo account. This lesson walks you through every click and every number.

Start With a Demo Account

A demo account is a practice account with virtual money. It uses real live prices, but no real money is at risk. Almost every broker offers one for free.

Plan the Trade Before You Click

A trade starts with a plan, not with the Buy button. Write down five things:

1. Pair and direction: EUR/USD, buy.
2. Entry: at the market, around 1.0852.
3. Stop loss: 1.0827, below recent support (25 pips).
4. Take profit: 1.0902, near resistance (50 pips).
5. Size: risk no more than 1% of the account.

Account:       $10,000 (demo)
Max risk 1%:   $100
Stop distance: 25 pips
Pip value needed = $100 ÷ 25 = $4 per pip  → up to 0.40 lots

We will be cautious and trade 0.10 lots ($1 per pip):
Risk   = 25 pips × $1 = $25  (0.25% of account)
Reward = 50 pips × $1 = $50
Risk : reward = 1 : 2

Learn the full method in Position Sizing.

Placing a EUR/USD Trade Step by Step

The steps below use MT5, but every platform works the same way (see Trading Platforms).

1. In Market Watch, find EURUSD. The quote is 1.0851 / 1.0852 (1-pip spread).
2. Right-click it and choose New Order (or press F9). The order ticket opens.
3. Set Type to Market Execution.
4. Set Volume to 0.10. Double-check this number.
5. Set Stop Loss to 1.0827.
6. Set Take Profit to 1.0902.
7. Click Buy by Market. You are filled at the ask, 1.0852.
8. Check the Trade tab in the Toolbox: the position should show with your SL and TP.

Reading the Open Position

Once the trade is open, the Toolbox shows a line like this:

• Current is the bid, because a buy is closed by selling.
• The trade starts at −$1.00. That is the 1-pip spread you paid. Every trade starts slightly negative.
• Swap stays at 0 unless you hold past the daily rollover.
• Your account's margin rises: 10,000 × 1.0852 ÷ 30 = $361.73 at 1:30 leverage.

Closing the Trade

A trade can close in three ways:

• Take profit is hit: closed automatically at 1.0902 for +50 pips.
• Stop loss is hit: closed automatically at 1.0827 for −25 pips.
• You close it manually: double-click the position (or click the ✕ in the Toolbox), then Close.

In our chart, price reaches 1.0890 but stalls below the target. Before the weekend you decide to close manually with the bid at 1.0882.

Calculating Profit and Loss

The result is in the quote currency. Convert it to your account currency if they differ.

Entry (ask):   1.0852
Exit (bid):    1.0882
Move:          1.0882 − 1.0852 = 0.0030 = 30 pips
Units:         0.10 lots = 10,000
P&L:           0.0030 × 10,000 = +$30.00

Sell 0.20 lots (20,000 units) USD/JPY at 150.00
Buy back at 149.40
Move:      150.00 − 149.40 = 0.60 = 60 pips in your favour
P&L (JPY): 0.60 × 20,000 = ¥12,000
P&L (USD): ¥12,000 ÷ 149.40 = +$80.32

Try your own numbers. Pick the pair, direction, entry, exit and size:

Review the Trade

Win or lose, write the trade down. Note the reason for entry, where the stop and target were, how it ended and how you felt. Over 20, 50 and 100 trades, this record shows what works. See Trading Journal.

Checklist Before Going Live

Do not move to real money until you can tick every box:

• You have placed at least 30–50 demo trades with the same rules.
• You can place market and pending orders, with SL and TP, without mistakes.
• Your broker is regulated by a strong regulator, and you have checked the licence.
• You use money you can afford to lose completely, not rent, savings or borrowed money.
• You risk a fixed small amount per trade, typically 0.5–1% of the account.
• Every trade has a stop loss set at entry.
• You know the pip value of your lot size on each pair you trade.
• You have a written plan: which pairs, which session, what setup, when to stop for the day.
• You keep a journal.
• You start live with a small account and small size, and grow only after consistent results.