The Jordan Evans
Trading Guide
Everything from “I just funded my account” to “where exactly do I take profit.” Broker setup, MT5 / TradeLocker / ActTrader, forex position sizing, and the options profit ladder — with calculators that do the math for you.
Read Brokers & platforms through Money safety in order, then do Your first week. Don’t skip to the forex section — funding confusion stops more people than bad strategy.
Go straight to Position sizing. If you can’t state your lot size as a formula, that is the highest-value ten minutes in this guide.
The whole risk model and ladder live in Part Two, with a calculator that builds your scale-out levels.
One idea holds this whole guide together: you decide how much you can lose before you enter, and you decide where you take profit before you’re emotional. Every rule here exists so the version of you staring at a red position never gets to make a new decision.
Brokers & platforms
A broker holds your money and executes your trades. A platform is the software you click buttons in. They are two different things, and one broker can offer several platforms.
This trips people up constantly. “I trade MT5” tells me nothing about who holds your funds. Your broker is who you deposit with, who you withdraw from, and who you contact when something breaks. The platform is just the window.
| Broker | Platform(s) | Where you trade | Notes |
|---|---|---|---|
| FHX | MT5 · TradeLocker | Desktop, web & mobile | Two platform options on the same broker — pick one and stay there while you learn. |
| Invidia | MT5 | Desktop, web & mobile | The industry standard. Same platform as FHX’s MT5 option, so the guide below covers both. |
| MagnoFX ↗ | ActTrader | Web, desktop & mobile | Different interface, identical concepts. Check how it expresses trade size before your first live order. |
The good news: these brokers work the same way underneath. Same funding flow, same order types, same pips, same lots. Learn the concepts once and you can sit down at any of the three. The only real difference is where the buttons are — and one trap per platform, which the platform guides call out.
For two of the three, your broker decides for you. Invidia is MT5. MagnoFX is ActTrader. Nothing to choose — go read that platform’s guide below and get comfortable.
FHX is the only one where you actually pick, since it offers both MT5 and TradeLocker:
Take TradeLocker to start today with nothing installed, on a clean modern ticket in your browser or phone. Take MT5 for the industry standard — the biggest library of indicators and EAs, and a tutorial for every question you’ll ever have. Either is a fine first platform. Pick one and stay there while you learn.
Open a demo account on whichever platform you'll use. Every one of these offers one free. You want to make your clicking mistakes on fake money — and you will make them.
Place a few demo trades today. Find the order ticket, attach a stop loss, close a position. That’s it. Ten minutes now saves an expensive misclick later.
Disclosure: I have a partnership with FHX and may earn compensation if you open an account through my links. That relationship does not change the education on this site, and you should evaluate any broker yourself before depositing.
Opening your account
Do these in order. Doing step 3 before step 2 is the single most common reason a first withdrawal gets held up.
Register on the broker’s portal
Sign up with your real legal name, exactly as it appears on your ID, and an email you actually control. Confirm the email. This creates your client portal — sometimes called the back office, dashboard, or client area. This is not your trading account yet.
Complete verification (KYC) — before you deposit
Every regulated or reputable broker must verify who you are. You’ll typically upload:
- Government photo ID — passport or driver’s licence, usually both sides, all four corners visible, no glare
- Proof of address — a utility bill or bank statement dated within the last 3 months showing your name and address
- Sometimes a selfie holding your ID, or a short liveness check
Approval is often same-day, sometimes 1–2 business days. Do this first. An unverified account can usually deposit but cannot withdraw — and finding that out when you want your money is a genuinely awful experience.
Create a trading account
Inside the portal, create the account you’ll actually trade. You’ll choose:
- Platform — MT5, TradeLocker, or ActTrader depending on your broker
- Account type — usually Standard (spread only) or Raw/ECN (tighter spread + commission). Standard is simpler to start.
- Leverage — see Leverage & margin. Lower is a guardrail, not a handicap.
- Base currency — pick USD unless you have a reason not to. It keeps the pip math clean.
You’ll be issued a login/account number, a password, and for MT5 a server name. Save all three somewhere safe right now. You will need the server name and you will forget it.
Log into the platform once, empty
Before any money moves, confirm you can actually log in. If the credentials don’t work with $0 in the account, they won’t work with $500 in it either — and you’d rather find out now.
Name matching is not a formality. The name on your broker account, your ID, and your payment method must all match. Depositing from your partner’s card or a friend’s bank account will get the funds frozen or reversed under anti-money-laundering rules, and untangling it takes weeks.
Funding: wallet → trading account
This is the step that confuses almost everyone. Your deposit does not land in your trading account. It lands in a wallet, and you have to move it across yourself.
If you have ever deposited money, opened MT5, and seen a balance of $0.00 — nothing went wrong. Your money is sitting in the wallet, one transfer away from being tradeable. Here is the whole picture:
Your payment method
Card, bank transfer, or crypto. In your own name.
Broker wallet
Your deposit lands here, in the client portal. Safe, but not tradeable. The platform can’t see it.
Trading account
Internal transfer moves it here. Now it shows as balance in MT5 / TradeLocker / ActTrader.
Depositing into the wallet
In your client portal, find Deposit (sometimes “Fund account” or “Payments”). Choose a method:
| Method | Typical speed | Watch out for |
|---|---|---|
| Debit / credit card | Instant – 30 min | Some banks flag forex deposits as gambling and decline. Call your bank, or use another method. |
| Bank transfer / wire | 1 – 3 business days | Copy the reference number exactly — it’s how they match the money to your account. Wires may carry a bank fee on both ends. |
| Crypto (often USDT) | Minutes – 1 hour | The network must match. Sending USDT on the wrong chain (TRC20 vs ERC20 vs BEP20) can lose the funds permanently. Copy the address, verify the network, send a small test first. |
| Local agents / e-wallets | Varies | Only use payment options listed inside the official portal. Never an address someone DMs you. |
Minimum deposits, fees, and available methods differ by broker and by country — check the current values shown in your own portal before you send anything, since they do change.
Moving it to the trading account
Look for Transfer, Internal transfer, or Move funds in the portal. You’ll pick:
Refresh your platform — in MT5, log out and back in if the balance doesn’t update. The money is now tradeable.
You don’t have to transfer everything. Keep part of your capital in the wallet and only push across what you’re actively risking this month.
It adds a deliberate two-minute step between you and revenge-trading a bigger balance. That friction is a feature.
Most brokers let you open several trading accounts under the same portal — useful for keeping a swing account separate from an experimental one, or MT5 separate from TradeLocker.
They all draw from the same wallet, and you transfer between them the same way.
Never deposit money you need. Not rent, not tuition, not borrowed money, not the card you’re carrying a balance on. Trading capital is money that can go to zero without changing how you eat this month. If that number is $100, start with $100 — the process is identical and the lessons are the same.
Withdrawals
Same road, opposite direction: trading account → wallet → your payment method. Knowing the rules in advance means your first withdrawal is boring, which is exactly what you want.
Free up the funds
You can only withdraw free margin — cash not tied up as collateral in open positions. Close or reduce trades first if you want the full amount.
Transfer trading account → wallet
Same internal transfer screen, reversed. Usually instant.
Request the withdrawal from the wallet
Submit to your verified payment method. Expect 1–3 business days for most methods; crypto is typically faster once approved.
Anti-money-laundering rules generally require you to withdraw back to the method you deposited from. Card deposits are usually refunded to that card up to the amount deposited; profit above that goes out by bank transfer or crypto.
This is not the broker being difficult. It’s a legal requirement, and every real broker has it.
- KYC still incomplete or documents expired
- Name on the payment method doesn’t match the account
- Trying to withdraw margin locked in open trades
- Withdrawing to a method never used for deposit
- An active bonus with volume conditions attached
Do a small test withdrawal early. Once you’re verified and funded, withdraw a small amount — even $20 — and watch it land. You confirm the pipe works while the stakes are trivial, instead of discovering a problem the first time it’s a real number.
A word on bonuses
Deposit bonuses usually come with conditions — a volume requirement before the bonus (and sometimes any profit from it) can be withdrawn. That can quietly push you to overtrade to “unlock” it. Read the terms, and when in doubt as a beginner, decline the bonus and keep your account simple.
Money safety rules
Read this once and it will save someone in our community a lot of money. Probably more than once.
Only ever deposit through the official portal
Log in yourself, at the address you typed. Never send money to a person’s account, a “manager,” a “funding agent,” or a wallet address someone sent you in a DM — including someone using my name or photo.
Nobody trades your account but you
Anyone offering to trade it for you in exchange for a cut is either running an unlicensed managed account or a straight scam. If you want someone to see your MT5, give them the investor password — it’s read-only. Never the master password.
Guaranteed returns don’t exist
Any fixed percentage per week or month is a promise no honest market participant can make. Signals, mentors, bots, funds — the guarantee is the tell.
Withdraw before you scale
Take some profit out. It converts screen numbers into proof the whole system works, and it stops an account from becoming a high score you refuse to touch.
Lock your account down: unique password not reused anywhere, two-factor authentication on both your portal and your email, and remember that your email is the master key — anyone who owns it can reset everything else.
MetaTrader 5
The industry standard, and the reason every tutorial you find on YouTube looks familiar. More powerful than you need on day one, which is fine — you can ignore 90% of it.
Logging in
You need three things, and people consistently forget the third:
Brokers run multiple servers, often with near-identical names and a demo/live variant of each. Picking the wrong one produces “invalid account” even when your credentials are perfect. Copy the server string from your portal — don’t type it from memory.
Finding your symbols
If EURUSD isn’t in Market Watch (Ctrl+M), right-click inside it and choose Show All. Brokers frequently append a suffix to symbol names — EURUSD.r, EURUSDm, EURUSD.pro. That’s normal; it just identifies the account type.
Placing a trade
- Press F9, or right-click the chart → Trading → New Order
- Volume is in lots.
0.10is a mini lot,0.01is a micro lot. Read it twice — typing1.00when you meant0.10is a tenfold size error and it happens constantly - Set Type: Market Execution for now, Pending Order for limits and stops
- Fill in Stop Loss and Take Profit before you click Buy or Sell
The MT5 trap: the Stop Loss and Take Profit fields want an actual price level, not a distance in pips. Long EUR/USD at 1.0850 with a 30-pip stop means typing 1.0820, not 30. Get this backwards and your stop lands somewhere absurd — or the order is rejected as invalid.
Managing positions
The Toolbox at the bottom (Ctrl+T) holds everything: Trade shows open positions and floating P/L, History shows closed trades. To move a stop, drag its line on the chart or double-click the position and edit it. To close, click the × on the row.
One Click Trading
It fires a live order the instant you click the chart, with no confirmation and no stop attached. Leave it off until you have a hundred trades behind you.
The trade history report
Right-click in History → Report. It exports every trade with your win rate and average result. This is your journal’s raw material.
On mobile: the MetaTrader 5 app uses the same login, password, and server. If you have trouble getting the app, your broker’s web terminal runs MT5 in a browser on any device with no install at all.
TradeLocker
Modern, browser-based, nothing to install. Charting is TradingView-based, so if you’ve ever used TradingView the chart will feel immediately familiar. This is the fastest route from “funded” to “first trade placed.”
Logging in
Open TradeLocker in your browser or app and you’ll select your broker and whether you’re on demo or live before entering your email and password. Choosing the wrong environment is the equivalent of MT5’s wrong-server problem — if your credentials are rejected, check this first.
Placing a trade
- Search for your instrument and open the chart
- Open the order ticket — Buy and Sell sit right on it with the live spread between them
- Set your size, then attach Stop Loss and Take Profit on the ticket itself, before submitting
- Confirm. Your position appears in the positions panel with live P/L
Use the risk-based sizing if your ticket offers it. Some TradeLocker configurations let you enter the dollars you want to risk and the stop level, and size the position for you. That is exactly the formula this guide teaches, built into the platform — use it, and sanity-check the lot size it produces against the calculator here until you trust it.
Managing positions
The positions panel lists everything open. You can usually drag stop and target lines directly on the chart, which makes moving a stop to break-even a one-second action. Closed trades sit in the history tab — that’s your journal source.
No install, no server names, clean order ticket, charts that already make sense. Getting from signup to a live chart is genuinely quick.
It’s a browser app — a dropped connection or a closed tab is a real risk mid-trade. Always leave a resting stop loss on the server so your protection doesn’t depend on your Wi-Fi.
ActTrader
A long-established platform that brokers run under their own branding. The interface looks different from MT5 and TradeLocker, but every concept transfers directly — you’re still choosing a size, attaching a stop, and setting a target.
Logging in
Your account credentials come from the MagnoFX portal. As with the others, make sure you’re pointed at the live environment rather than demo when you intend to trade real money — and at demo when you’re practising.
The ActTrader trap — check this before your first live order. Depending on how the broker configures it, trade size may be expressed in lots or in units / thousands (K). 10 could mean 10 lots or 10,000 units — a hundredfold difference in risk. Do not guess.
How to check your size units in 60 seconds
On a demo account, open the smallest position the platform allows on EUR/USD.
Watch the floating P/L as price moves 10 pips.
Roughly $1 per 10 pips means you’re on a micro lot (1,000 units). Roughly $10 means a mini lot (10,000). Roughly $100 means a full standard lot — and you now know exactly what that field means.
This works on any platform, and it is worth doing once on every new account you open. Sixty seconds of demo removes the single most expensive category of beginner error.
Placing a trade
- Open the rates or dealing window and select your pair
- Choose Market for immediate execution, or an Entry order to wait at a price
- Enter your size — in whatever unit you just confirmed above
- Attach stop and limit orders to the position; do it at entry, not later
- Positions and orders live in their own panels, with closed trades in the account history
Side by side
Same job, three interfaces. This is the whole difference.
| MT5 | TradeLocker | ActTrader | |
|---|---|---|---|
| Used by | FHX, Invidia | FHX | MagnoFX |
| Install needed | Desktop app (web terminal available) | None — browser | Web or desktop |
| Login needs | Login + password + server | Broker + demo/live + email | Credentials + environment |
| Size expressed in | Lots | Lots (risk-based option on some setups) | Lots or units — verify |
| Stop loss entered as | Price level, not pips | On the ticket, price or distance | Attached order |
| Charting | Native MetaTrader | TradingView-based | Native ActTrader |
| The one trap | Wrong server name | Demo/live mix-up; browser tab closing | Size units |
Everything past this point is platform-independent. Pips, lots, sizing, stops, R multiples, the options ladder — none of it changes based on which window you're clicking in. Learn it once.
Pairs & quotes
You never buy “the euro.” You buy the euro against something. Every forex trade is a bet that one currency outperforms another.
Buy = you think the euro strengthens against the dollar. Sell = the opposite. Unlike stocks, selling is as native as buying — there’s nothing to borrow.
Two prices, always. You buy at the higher and sell at the lower, which means every trade starts slightly in the red. That’s not a bug, it’s the cost of doing business.
| Category | Examples | Verdict |
|---|---|---|
| Majors | EURUSD · GBPUSD · USDJPY · USDCHF · AUDUSD · USDCAD · NZDUSD | Start here and stay here. Tightest spreads, deepest liquidity, most predictable behaviour. |
| Minors / crosses | EURGBP · GBPJPY · EURAUD | No USD involved. Wider spreads, bigger swings. Fine once you’re consistent. |
| Exotics | USDTRY · USDZAR · USDMXN | Avoid. Spreads can eat 20–40 pips before you’re even right. |
Pick two majors and trade only those for ninety days. Watching fourteen charts guarantees you know none of them. EUR/USD and one other is plenty to build a real edge on.
Pips — the unit of movement
A pip is the standard increment a pair moves. It’s how you measure distance: to your stop, to your target, and how far you were wrong.
1.08505
EUR/USD 1.0850 → 1.0880 is 30 pips.
150.204
USD/JPY 150.20 → 150.50 is also 30 pips. Yen is quoted in hundreds, so the scale shifts two places.
A pip is a distance, not an amount of money. How much a pip is worth to you depends entirely on your position size — which is the next section.
Lots — the unit of size
A lot is how many units of currency you control. Pips tell you how far price moved; lots tell you what that movement was worth to your account.
| Lot type | Units | Value of 1 pip | A 30-pip loss costs | Realistic for |
|---|---|---|---|---|
| Standard — 1.00 | 100,000 | $10.00 | $300 | $50k+ accounts |
| Mini — 0.10 | 10,000 | $1.00 | $30 | $5k – $25k |
| Micro — 0.01 | 1,000 | $0.10 | $3 | Starting out |
| Nano — 0.001 | 100 | $0.01 | $0.30 | Testing live |
EURUSD, GBPUSD, AUDUSD — anything ending in USD gives exactly $10 per pip per standard lot. Clean math, which is another reason to start with majors.
USD/JPY at 150.00: one standard lot pip = ¥1,000 ÷ 150 = $6.67. Your platform shows this live — check it before sizing rather than assuming $10.
Position sizing
Amateurs pick a lot size and hope. Professionals pick the loss first and solve for the lot size. Same formula, opposite direction, completely different career.
Lots = Risk in dollars ÷ ( Stop in pips × Pip value per lot )
Decide the dollar risk first
1–2% of the account. On $5,000 that’s $50–$100. This number is fixed before you look at a chart, and it does not move because a setup looks especially good.
Take the stop from the chart, not your wallet
Where does the idea become wrong? Below the swing low, beyond the range, past the level. That distance in pips is an input you don’t get to negotiate.
Solve for lots
The formula returns the only size that satisfies both. A wider stop means a smaller position — not a bigger loss. This is the whole trick.
Round down, never up. Your broker’s minimum step is usually 0.01 lots.
Why 3R matters: at three-to-one, you can be wrong twice as often as you’re right and still grow the account. That asymmetry — not prediction accuracy — is the entire job.
Leverage & margin
Leverage decides how much cash the broker locks up. Position size decides how much you lose. Confusing the two is the most expensive beginner mistake in this market.
At 50:1, controlling one mini lot of EUR/USD ($10,000 notional) requires around $200 of your balance as collateral. The rest of your cash isn’t “invested” — it sits there absorbing drawdown.
Because it permits a size you couldn’t otherwise take. 500:1 doesn’t make your losses bigger — it removes the guardrail that would have stopped you clicking 5 lots on a $2,000 account.
When floating losses eat your free margin, the broker force-closes positions at whatever price is available. You don’t get consulted. This only happens to accounts that were oversized from the start.
Size every trade with the formula above and your leverage setting becomes almost irrelevant. Risk 1% and you will never see a margin call — your stop hits first, every single time.
Stops, targets & R
R is your unit of account. 1R is the dollar amount you risked. Think in R instead of dollars and every trade becomes comparable — and the urge to overweight one idea disappears.
A resting order that closes you at a pre-set level. In forex you always use a hard one — the market runs 24/5, spreads are tight, gaps are rare. There is no excuse for a mental stop here.
The opposite order. Put it at a level the chart justifies — prior high, measured move, range extreme — not at a round dollar figure you happen to want.
Target distance ÷ stop distance. Below 1.5R, skip the trade. Spread, slippage, and your own error rate eat that edge.
Expectancy: why reward-to-risk beats being right
| Win rate | At 1R | At 2R | At 3R |
|---|---|---|---|
| 30% | −0.40R | −0.10R | +0.20R |
| 40% | −0.20R | +0.20R | +0.60R |
| 50% | 0.00R | +0.50R | +1.00R |
| 60% | +0.20R | +0.80R | +1.40R |
Expectancy per trade, before costs. A 30% win rate is profitable at 3R. A 50% win rate is break-even at 1R. Stop chasing accuracy and start chasing asymmetry.
Sessions & timing
Forex runs 24 hours, five days a week — but it isn’t one continuous market. It’s four regional sessions with completely different personalities.
| Session | Hours (ET) | Character | Best pairs |
|---|---|---|---|
| Sydney | 5pm – 2am | Thin, drifting, wide spreads | AUDUSD, NZDUSD |
| Tokyo | 7pm – 4am | Ranges, respects levels | USDJPY, AUDJPY |
| London | 3am – 12pm | Highest volume of the day, real trends begin | EURUSD, GBPUSD |
| New York | 8am – 5pm | US data, reversals, afternoon fade | EURUSD, USDCAD |
8am – 12pm ET
London and New York are open at the same time. Tightest spreads, cleanest moves, best follow-through. If you only trade four hours a day, trade these four.
Check it every morning
NFP (first Friday), CPI, and FOMC move majors 100+ pips in seconds with spreads widening tenfold. Beginners should be flat through these, not positioned.
What a trade actually costs
Paid on every entry. On majors during London/NY expect 0.5–1.5 pips. Consistently above 2 on EUR/USD is a broker problem, not a market condition.
Raw-spread accounts charge a flat fee instead — often around $3.50 per side per standard lot. Frequently cheaper overall than a “zero commission” account with padded spreads. Check your own schedule.
Hold past 5pm ET and you pay or receive the interest-rate difference between the two currencies. Small daily, meaningful over weeks. Wednesday charges triple to cover the weekend.
A 10-pip scalp with a 1.5-pip spread gives away 15% of the target to costs before you’re right about anything. This is why most beginners who scalp lose even with a decent win rate. Longer holds dilute the exact same cost to nothing.
The gap between your stop price and your actual fill. Near-zero in quiet majors, brutal around news. Another argument for being flat through data releases.
EUR/USD and GBP/USD move together roughly 80% of the time. Long both isn’t two 1% trades — it’s one 2% trade wearing a disguise.
Order types you’ll actually use
Market order
Fills now at the best available price. Use when the level is already moving and you need in. Costs you the spread plus any slippage.
Limit order
Fills only at your price or better. A buy limit sits below the market, a sell limit above. This is how you buy a pullback into support without watching the screen.
Stop order
Triggers once price trades through your level. A buy stop sits above the market — this is how you enter a breakout. Also the mechanism behind your stop loss.
Bracket / OCO
Stop loss and take profit attached to the position; one filling cancels the other. Set both at entry. A trade without a resting stop is a trade you’re managing with your feelings.
Trailing stop
Follows price by a fixed pip distance. Useful for letting a trend run, dangerous in chop where it clips you on the first pullback.
How beginners blow up
Sizing by feel
“I’ll do one lot” instead of solving for it. Nearly every account death starts here.
Moving the stop
Widening a stop to avoid a loss turns a 1R loss into a 4R loss. The stop is a promise, not a suggestion.
Revenge trading
Doubling size after a loss to win it back. Two rules fix it: max trades per day, max loss per day. Hit either and the laptop closes.
Trading dead hours
Taking setups at 1am ET because you’re bored. Thin liquidity, wide spreads, random moves.
Too many pairs
Fourteen charts guarantees you know none of them. Two majors, ninety days.
No journal
If you can’t state your win rate and average R, you don’t have a strategy — you have a hobby.
The big one: going live too fast, then going live too big. Demo until you have 50 logged trades and positive expectancy. Then trade the smallest size your broker allows for a month — not to make money, but to meet the person you become when real money is moving. That person is a stranger, and you want to meet them cheaply.
Options in ninety seconds
Quoted premium $1.85
× 100 shares
= $185 per contract
Buy 5 contracts and you spent $925, not $9.25. Every price on the chain is per-share.
Max loss on a long option is 100% of the premium and nothing more. No margin call, no negative balance. That capped downside is exactly why the risk model here looks nothing like forex.
What moves your premium
In forex, price is the only variable. In options you can be right on direction and still lose — because two other forces are working on the contract at the same time.
How much the option moves per $1 in the stock. A 0.50 delta call gains about $0.50 of premium per $1 up. Also a rough proxy for the odds of finishing in the money.
What you lose every day just for holding. It accelerates hard inside the final two weeks. Theta is the rent you pay on leverage, charged nightly, weekends included.
Implied volatility is the market’s priced-in expectation of movement. When IV falls, premium falls — even if the stock goes your way.
| Contract choice | Delta | Cost | Theta burn | What it needs to work |
|---|---|---|---|---|
| Far out of the money | 0.15 – 0.25 | Cheap | Severe | A big, fast move. Usually a lottery ticket. |
| Slightly OTM / at the money | 0.40 – 0.55 | Moderate | Highest | A normal move, reasonably soon. The default. |
| In the money | 0.65 – 0.80 | Expensive | Mild | Just direction. Behaves closest to the stock. |
The classic loss: buying calls into earnings, the stock gaps up 4%, and the position is down 30% because IV collapsed the second the news was public. Never buy elevated IV expecting direction alone to save you.
Why I don’t use a hard stop on options
This isn’t recklessness. A resting stop order behaves badly on a leveraged, thinly quoted instrument — for four concrete reasons.
The spread fills you at a terrible price
An option quoted $1.80 / $1.95 has an 8% spread built in. A triggered stop becomes a market order and takes whatever the book offers — often well below where it printed.
Leverage turns noise into a 30% candle
The stock wiggles 1% intraday and your premium swings 25–35%. Any stop tight enough to protect you is guaranteed to be hit by ordinary noise.
IV moves the price without the stock moving
A volatility drop can knock 20% off your contract while the underlying sits perfectly still. Your stop fires on something that has nothing to do with your thesis.
Your downside is already capped
You cannot lose more than the premium. A stop-loss order exists to prevent unlimited loss — a risk long options structurally don’t have.
So the stop doesn’t disappear. It moves — from a resting order on the contract to a decision rule you enforce yourself. That’s the next section, and it has three layers.
The risk model that replaces it
Three layers. Together they do everything a stop loss did, without handing your fill to the spread.
Size so a total loss is survivable
Sizing is the stop. Assume the position goes to zero and ask whether you’d still be fine. If the answer is no, the position is too big — and no exit rule can fix that.
Mental stop at −50% to −60% of premium
Not an order — an alert and a decision. Down 50–60% on the contract and you’re out, at the mid, on a limit order you control. Past 60% the recovery math turns ugly: a −60% position needs +150% just to get back to flat.
A hard invalidation level on the underlying
This is the layer most people skip and the one that matters most. Before entry: “I’m long these calls because SPY held 5,480. If SPY closes below 5,480, my reason is gone.” When the level breaks you exit — regardless of what the option shows. The chart tells you you’re wrong long before the premium does.
Account $25,000 · risk 1.5% = $375 · mental stop −60%
Premium budget = $375 ÷ 0.60 = $625
→ buy 6 contracts at $1.00 = $600 debit
Hitting the −60% mental stop costs $360, about 1.4% of the account. Even a catastrophic gap to zero costs $600, or 2.4%. Both are survivable — which is the entire point.
The profit ladder
Never sell all of it and never hold all of it. Scale out in thirds at pre-set levels so the trade pays for itself before you ever ask it to be a home run.
First cut — sell one third
The de-risking trim, taken anywhere in the +20–30% band. Covers commissions and slippage and converts paper into cash. Psychologically this is the trim that lets you hold the rest without flinching — the trade is now working for you.
Second cut — sell another third
The payday trim. After this you’ve recovered most or all of the original debit. Whatever the last third does, this trade is not a loser.
The runner — final third
Held for the actual target: the measured move, the prior high, the level that justified the trade. Manage it on the underlying’s structure, not the premium. This third is where outsized months come from.
Mental stop — the whole position
If it goes the other way first, the ladder never starts. Exit at the mid on a limit order. No averaging down, no “one more day.”
Every level goes into the platform as a GTC limit order the moment you enter. Decisions made calmly at entry execute themselves. Decisions made in the middle of a green candle do not.
Adjust the ladder to the timeframe
25 / 50 / runner with a −50/60% stop is the baseline for a normal swing. It flexes with how much time you bought:
| Trade type | First cut | Second cut | Runner | Mental stop |
|---|---|---|---|---|
| 0DTE / same day | +15–20% | +35% | rare — usually flat by close | −30–40% |
| Weekly — 2–7 DTE | +20–25% | +50% | small, hard time stop | −40–50% |
| Swing — 21–45 DTE | +25–30% | +50–60% | to the chart target | −50–60% |
| LEAPS — 6–12 months | +50% | +100% | hold for the thesis | underlying level only |
Less time means less chance to recover. On 0DTE a −50% drawdown frequently becomes −100% within the hour, so the stop moves up and the targets come down.
With months of runway a −50% drawdown is often just an ordinary pullback. There, the underlying’s invalidation level is the only stop that means anything.
Ladder calculator
Enter your account and the contract price. This sizes the position from your risk rule, splits it into thirds, and shows exactly what you bank at each rung — plus both outcomes for the runner.
Place all cuts as GTC limit orders the moment you enter.
Holding every contract to the runner target would return more than laddering does. The ladder does cost you upside on your very best trades. What it buys is that the same position hitting the mental stop costs you the full risk amount un-laddered, versus a small fraction once you’ve trimmed twice.
You give up tail upside to delete tail downside. Across fifty trades that is overwhelmingly worth doing — because you only need to survive in order to keep compounding.
The exit nobody teaches: the time stop
Options don’t only lose when they go against you. They lose when nothing happens. Forex holds your position patiently forever; a contract charges you rent every single night.
Halfway to expiry, halfway to target
Bought 30 days out and you’re 15 days in with the trade flat or barely green? Close it. The thesis needed a move it hasn’t produced, and theta is about to accelerate against whatever’s left.
Never hold a long option into the final week
Inside 7 DTE, decay dominates everything else. Take the loss, take the small win, or roll out — but don’t sit there paying maximum rent for minimum time.
Buy more time than you think you need
Expecting a 5-day move? Buy 21–30 DTE. The extra premium is cheap insurance against being right one week late — the most common way a correct call still loses money.
Exit before a binary you didn’t plan for
If earnings, a Fed decision, or a court date lands before your expiry and it wasn’t part of the thesis, you’re holding a coin flip on IV. Close first, re-enter after if you still like it.
Mistakes that look like bad luck
Buying the cheapest strike
Far-OTM contracts feel like value at $0.12. They’re priced that way because they usually expire worthless.
Buying earnings for direction
You’re paying peak IV for a coin flip and getting crushed on the vol drop even when you’re right.
Averaging down
Adding to a losing contract while theta accelerates is doubling a bet the market keeps repricing lower.
Ignoring the spread
Quoted $0.90 / $1.15 and you start down 22%. Trade liquid names with penny-wide markets, and always use limit orders at the mid.
No pre-set exits
Without GTC limits at your ladder levels you will hold a +40% winner back to break-even. Everyone does. That’s why the orders exist.
Position too big to obey
The rule breaks because the size was wrong. If a −60% loss would ruin your week, you were never going to take that loss.
Nine out of ten of these trace back to one thing: sizing you couldn’t emotionally afford. Fix the size and most of your discipline problems quietly disappear.
Your first week
Do these in order. No trade in this list uses meaningful money — that’s deliberate.
- Register with your broker using your real legal name
- Complete KYC — ID and proof of address
- Turn on 2FA for the portal and your email
- Create a demo trading account on your platform
- Log in successfully. Save login, password, and server
- Find EUR/USD and open the chart
- Place a demo trade with a stop loss and take profit attached
- Run the 60-second size check so you know exactly what the size field means
- Move a stop to break-even. Close a position manually
- Find the trade history export — that’s your journal source
- Deposit a small amount you can genuinely afford to lose
- Transfer wallet → trading account and confirm the balance appears
- Do a small test withdrawal and watch it land
- Use the position size calculator before every single trade
- Write down your daily max loss and max trades. Stick to it
- 50 logged trades with entry, exit, stop, size, and R result
- A win rate and average R you can state from memory
- Positive expectancy across those 50 — not across your best 10
- One full month without moving a stop or breaking a daily limit
Hit all four and size up gradually. Miss any one and the answer is more reps, not more money.
The rulebook
Both markets on one page. If you only ever come back to one section of this guide, make it this one.
| Forex | Long stock options | |
|---|---|---|
| Unit of movement | Pip — 0.0001 (0.01 on JPY) | Premium — quoted per share |
| Unit of size | Lot — 100k / 10k / 1k units | Contract — 100 shares |
| Risk per trade | 1–2% of account | 1–2% of account |
| Stop loss | Hard order, always, set at entry | Mental −50/60% + underlying level |
| Max possible loss | Stop distance × pip value | 100% of premium, no more |
| Profit taking | Target at chart level, min 1.5R | Ladder: +25% / +50% / runner |
| Time pressure | None — only swap cost | Severe — theta, use a time stop |
| Biggest killer | Oversizing and moving stops | Cheap strikes and no exit plan |
Decide the loss before the entry
Every time. No exceptions for setups that look especially good — those are the ones that get you.
Put the exits in while you’re calm
Stops and targets go in at entry. Your future self, mid-trade, is not a reliable decision-maker.
Journal every trade in R
Review weekly. Without numbers you can’t tell a bad strategy from a bad week.
Disclosures
Educational content only. Everything in this guide is general education about how forex and options markets work. It is not personalized investment advice, not a recommendation to buy or sell any specific instrument, and not a solicitation. Nothing here is tailored to your financial situation, objectives, or risk tolerance, and no outcome is promised or implied.
Risk warning. Trading forex and options carries a substantial risk of loss, including the loss of your entire deposit. Leverage magnifies both gains and losses. Past performance — mine or anyone else’s — does not indicate future results. Most retail traders lose money. Only risk capital you can genuinely afford to lose.
Broker relationship. I have a partnership with FHX and may receive compensation if you open an account through my links. Other brokers referenced in this guide are named because members of this community use them, and their platform details are provided for education. That relationship does not change the content here, and you should independently evaluate any broker — including its regulatory status, funding terms, and withdrawal policy — before depositing money.
Verify the specifics. Minimum deposits, fees, spreads, leverage limits, payment methods, and platform menus change, and vary by country and account type. Always confirm current details inside your own broker portal rather than relying on any figure quoted here as an example.
The Jordan Evans Trading Guide · jordanevanstradingguide.com