Stock Trading with Us

1. What is an exchange and how do trades happen?

An exchange is an organized electronic marketplace where buyers and sellers meet to trade securities (stocks, ETFs, bonds). You operate through a broker: you send an order, it goes into the order book, and it’s executed when a matching counter-order appears at your price.

2. Order types: market, limit, stop

Quick reference

• Market — immediate execution at the best available price. Simple, but price may slip during high volatility.
• Limit — executed at your price or better. If the price isn’t reached, the order waits.
• Stop (Stop-Market) — triggers at the stop price and becomes a market order. Often used to enter on a breakout.
• Stop-Limit — after triggering, becomes a limit order; better price control, but the fill isn’t guaranteed.
• Time in force: DAY (current session only) or GTC (good-’til-canceled per broker’s rules).

3. Trading hours and sessions

For the U.S. (NYSE/Nasdaq): Regular 9:30 AM–4:00 PM ET. Pre-Market is available before the open and After-Hours after the close. Liquidity is lower and spreads wider in extended hours — prefer limit orders.

Holidays and shortened sessions are published by the exchanges. Start with the regular session.

4. Risk management: stop-loss, take-profit, position size

Stop-loss (SL) — the level where you exit with a limited loss. Take-profit (TP) — the level to take profit. We provide these levels for every signal in the brief.

How to estimate position size quickly

Decide your dollar risk per trade (e.g., 1% of the account). In the brief we provide the Risk parameter — the distance from Entry to SL in dollars per share/unit. Then position size is N = dollar_risk / Risk (round down to a whole number).

Example: account $50,000 ⇒ dollar risk 1% = $500. Brief shows Risk = $6.30. Then N = ⌊500 / 6.30⌋ = 79 shares.

We include Entry/SL/TP1 and Risk in the brief. Adjust position size to your risk tolerance. We do not recommend risking more than 5% of capital per trade; optimal range: 1–2%.

5. How to read the SessionAhead brief and place orders

1. Open our daily Email brief. It includes market status and levels for entry (BUY STOP), Stop-loss (SL) and target TP1 — the first target where we take 50% of the position. The remaining 50% is managed with a Trailing Stop that follows price.
2. Place a pending BUY STOP at the specified level. Time in force is usually GTC. Set Stop-loss and TP1 as separate orders. If your broker supports linked orders (OCO/Bracket), you can place everything in a single ticket.
3. If the next day the levels are updated, cancel the old order and place the new one. If the setup is canceled — delete the order.
4. After entry, check that the Stop-loss is active. We comment further position management in the brief.
5. What the levels mean in the brief:
   • ENTRY — place a pending BUY STOP (or SELL STOP for short) at this level.
   • SL — protective Stop-loss immediately after placing the entry.
   • Risk — used to size the position: N = dollar_risk / Risk.
   • TP1 — the first target for partial take-profit and switching to a Trailing Stop.

Sample brief (Email)

🆕 New signal:
• Entry: 454.30
• SL: 451.10
• TP1: 462.70   (take 50% profit; remainder — Trailing Stop)
• Validity: until the close of the next session
• Risk: $3.20 per share

🗓 Event Overlay
Risk classification: MED — Mon 08:30 ET: Empire State Manufacturing; FOMC week (Sep 16–17).


📌 Positions update:
• SPY — 2025-09-02; LONG
  Entry: 642.80 | SL: 634.92 | Risk: $7.88 | TP1: 650.68
  Status: Filled
  Notes: Buy stop filled on 2025-09-03 at 642.80.

• SPY — 2025-08-04; LONG
  Entry: 629.94 | SL: 619.28 | Risk: $10.66 | TP1: 640.60
  Status: TP1 50% filled
  Notes: Closed 50% at TP1; stop unchanged.

Closed today:
• SPY — 2025-09-03; Result: +1.3×Risk
  Closed via: TP1 hit; remainder exited on trailing stop
  Notes: Full exit within the session.
        

6. Common mistakes + checklist

Mistakes

• Trading “everything at once” without a risk cap.
• Entering without a Stop-loss.
• Market orders during thin hours (pre/after market).
• Ignoring key releases (CPI, FOMC, NFP) and wider spreads.
• Changing the plan on the fly.

Pre-trade checklist

• Have a signal and a clear Entry level?
• Calculated dollar risk per trade and position size?
• Placed Entry, Stop-loss and target?
• Logged the trade in your journal?

7. Glossary

• ETF (Exchange-Traded Fund) — a fund that holds a basket of assets (e.g., S&P 500 via SPY) and trades like a stock.
• Lot — a standard trading unit. Many brokers allow any share quantity; colloquially a “lot” is often 100 shares.
• Spread — the difference between the best bid and the best ask. The narrower it is, the cheaper the entry/exit.
• Slippage — execution worse than expected due to fast moves or low liquidity. Reduced by using limit orders.
• Liquidity — how quickly and in what size you can trade an asset without moving the price much.
• Margin call — broker’s demand to add funds / reduce position when margin is insufficient.
• Long / Short — a long position (buy expecting a rise) / a short position (sell borrowed shares expecting a fall).