A single mistake could spell the difference between winning and losing a trade.
You can have a solid setup and a well-thought-out market bias, but none of that matters much if you enter the wrong position size, forget your stop, or accidentally click buy instead of sell.
That’s why it pays to develop the habit of thoroughly planning and checking your orders.
Here are four steps you can follow to build better order habits.
Identify your entry, stop loss, and profit levels
I won’t go into the “whys” of a trade since everyone has their own methods for determining directional bias, time, and volatility expectations.
After you’ve made your fundamental and technical analyses, you’ll be ready to mark your entry and exit levels.
Your entry and profit targets can stay flexible as the market develops, but be firm on your stops. Whether you’re using a chart stop, time stop, or volatility stop, it should clearly mark where your trade idea is no longer valid.
Once you have your entry and exit levels, you can check your reward-to-risk ratios to see if the trade is worth taking on.
Use proper position sizing
Proper position sizing is hands down one of the most important skills a trader can develop. Without it, you risk going too heavy and blowing up your account or playing it too safe and not making the most of a solid strategy.
Trade too big and a few losses can put a serious dent in your account. Trade too small and you may not be making the most of a strategy that otherwise fits your risk tolerance.
New traders are often advised to risk no more than 1% of their account on a single trade. Keeping your risk small can help you stay in the game while you build experience and consistency.
Use the BabyPips.com Position Size Calculator!
Of course, you could always round them off (as long as you stay within your max risk) to make your trade journaling easier, or if your broker isn’t flexible with their position size offerings.
Promoted: You can plan your entry, stop, position size, and exit perfectly and still lose the trade. That’s because good decisions don’t always produce good outcomes.
In “Thinking in Bets”, former poker champion Annie Duke explains how to make smarter decisions when the outcome is uncertain. For traders, that means thinking in probabilities, separating skill from luck, and judging the quality of your process instead of letting one winning or losing trade mess with your head.
Build a better decision-making process with “Thinking in Bets” by Annie Duke!
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Determine the type of order you need
An “order” is simply how you tell your broker when and how you want to enter or exit a trade.
Make sure you understand the basic order types your broker supports before putting real money on the line.
As you gain experience, you can also explore tools like good till canceled (GTC), good for the day (GFD), one cancels the other (OCO), and one triggers the other (OTO).
These orders can make trade management easier, especially when you can’t sit in front of your charts all day
Just remember that features and order types can vary by broker.
Read up on them and practice using them A LOT before going live!
Monitor your trade
Your involvement in your trade doesn’t stop with placing orders.Whether you’re a day, swing, or position trader, you have to keep close tabs on price action and market drivers to see if your initial trade idea has been invalidated.
Check the economic calendar often and read market news updates to see if the fundamental story or market sentiment is changing.
With time and experience, you’ll get better at figuring out which headlines are just noise and which ones actually matter for your position.
The trick is finding a balance between adapting to changing market conditions and sticking to your original trading plan.
Remember, good trading isn’t about having a perfect win rate. It’s about consistently doing the right things, managing your risk, and avoiding unnecessary mistakes.
So, try to make a habit of accurately placing your trade orders and double-checking them every time.
The forex market is unpredictable enough; don’t make it harder on yourself to be successful with execution mistakes!
This article covers the full process of entering trade orders, and position sizing is one step many traders handle by feel instead of a proper formula. Premium members can read our lesson:
📖 Position Sizing: How to Calculate Your Trade Size
Reading this helps you understand how to calculate your exact position size, why your stop loss distance and trade size are directly connected, and how to apply the formula correctly to any currency pair or account currency.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just what trade size to use, but exactly how to calculate it using your account balance, risk percentage, and stop loss distance before every entry.
