How a Trade Makes — or Loses — Money

A trade has four moving parts: direction, size, entry and exit. Get comfortable with how they combine and every account statement you'll ever read becomes obvious.

Long and short

Going long means buying — you profit if the price rises. Going short means selling first — you profit if it falls. Forex has no awkwardness about shorting; betting on a currency to weaken is as normal as backing it to strengthen. Half the opportunities in any market are on the way down.

The arithmetic of a trade

Say you go long GBP/USD at 1.2700 and close at 1.2750 — 50 pips in your favour. Your profit is 50 pips times whatever each pip is worth at your position size. Sold instead, same numbers, the 50 pips would be a loss. The market doesn't know or care which way you bet; it just moves, and your position turns that movement into pounds — in either direction.

Where beginners come unstuck

Not on winners — on letting losers run. A trade 20 pips against you whispers that it'll come back. Sometimes it does. The times it doesn't are what end accounts, which is why professionals decide their exit *before* they enter: a stop loss where the idea is proven wrong, a target where it's proven right. Entries get all the attention; exits pay the bills.

The honest version

Every trade on our public Tape is logged with its entry, stop and target the moment it's called — because a plan you can change halfway through isn't a plan, it's a mood. That discipline is free to copy, and it's the single most valuable thing on this site.

Educational content only — never financial advice. Most retail traders lose money. Capital at risk. 18+.