📘 Chapter 7 Workbook

LONGvs.SHORT

Master entries, exits, and time-in-trade through hands-on practice with paper trading. Build the foundation for consistent, profitable trading.

Live Market Simulation

Exercises

Paper Trades

2-3h

Duration

⚠️

Important: This material is for educational purposes only and does not constitute financial advice. Always practice with paper trading before risking real capital. Trading forex and cryptocurrencies involves substantial risk of loss. Never trade with money you cannot afford to lose.

🎒

Before You Start

What You'll Need

📊

TradingView Account — Free account at tradingview.com with Paper Trading connected

🧮

Position Size Calculator — Use the built-in calculator below or Babypips/MyFXBook

🕐

Market Hours Converter — Check forexmarkethours.com for your timezone

📝

This Workbook — Complete all interactive exercises in order (7A → 7B → 7C → 7D)

⏰

2-3 Hours — Set aside focused practice time without distractions

📈

Core Concepts

Understanding LONG vs SHORT

The two fundamental trade directions every trader must master

📈

LONG

Buy Low, Sell High

BUY

SELL

✓ Profit when price goes UP
✓ Enter (buy) at support levels
✓ Exit (sell) at resistance levels
✓ Stop loss placed BELOW entry

📉

SHORT

Sell High, Buy Low

SELL

BUY

✓ Profit when price goes DOWN
✓ Enter (sell) at resistance levels
✓ Exit (buy) at support levels
✓ Stop loss placed ABOVE entry

🎮 Interactive: See How Profit/Loss Changes

TP: $110

ENTRY: $100

SL: $95

Unrealized P/L

$0.00

📐

Exercise 7A

Long & Short Trade Planner

Using TradingView's Long/Short Position Tool

🎯 Objective

Practice planning long and short trades visually on TradingView charts. Learn to identify entry, stop loss, take profit, and risk-to-reward ratio BEFORE placing any trade.

📋 Instructions

Open TradingView and connect Paper Trading
Choose ONE forex pair (e.g., EUR/USD, GBP/USD, or USD/JPY)
Choose ONE crypto pair (e.g., BTCUSDT, ETHUSDT)
For each pair, plan ONE long trade and ONE short trade using the Long/Short Position tool
Fill in the table below with your planned trade details
Take a screenshot of each trade plan

Key Concept

What's the difference between
LONG and SHORT?

👆 Click to reveal

Answer

LONG = Buy low, sell high
(profit when price rises)

SHORT = Sell high, buy low
(profit when price falls)

📊 Interactive Risk:Reward Visualizer

RISK (pips)

R:R Ratio1:2

REWARD (pips)

Risk (Stop Loss Distance)

Reward (Take Profit Distance)

📊 Trade Planning Table

Asset	Direction	Entry Price	Stop Loss	Take Profit	Risk	Reward	R:R	Notes
EUR/USD	↑ Long	1.1000	1.0950	1.1100	50 pips	100 pips	1:2	Example trade
	↑ Long
	↓ Short
	↑ Long
	↓ Short

📸 Screenshot Checklist

0/5

✓

Entry marker clearly visible

✓

Stop loss handle placed

✓

Take profit handle placed

✓

R:R ratio displayed on chart

✓

Asset name and timeframe visible

🧠

Knowledge Check

You have a trade with 30 pips risk and 90 pips potential reward. What is the Risk-to-Reward ratio?

A1:1

B1:2

C1:3

D3:1

💭

Reflection Questions (7A)

1Which was easier to plan—long trades or short trades? Why?

2Are any of your R:R ratios below 1:1.5? Would you still take that trade?

🧮

Exercise 7B

Position Size & Risk Check

Calculating Proper Position Size for Risk Management

🎯 Objective

Learn to calculate proper position size so that your risk at stop loss equals approximately 1% (or less) of your account balance. This is critical for protecting your capital.

📊 Why 1% Risk Per Trade?

How many consecutive losses you can survive at different risk levels:

1% Risk

70+ losses to lose 50%

2% Risk

35 losses

5% Risk

14 losses

10% Risk

💡 Lower risk = more room for error while you learn

📊

Forex Position Size Calculator

Account Balance

Currency

Risk Percentage (%)

Stop Loss (pips)

₿

Crypto Position Size Calculator

Account Balance

Risk Percentage (%)

Entry Price

Stop Loss Distance (%)

❌

Common Position Sizing Mistakes

✗Risking too much per trade — New traders often risk 5-10% or more. Stick to 1% or less.

✗Guessing position size — Always use a calculator. Your "gut feeling" is usually wrong.

✗Not accounting for stop loss distance — Wider stop = smaller position size to maintain same % risk.

💭

Reflection Questions (7B)

1Were you surprised by how small the position sizes were when risking only 1%?

📝

Exercise 7C

Paper Trading Practice Log

Placing and Tracking Real Mock Trades

🎯 Objective

Place at least 6 trades on Paper Trading (3 longs + 3 shorts) and track the results. Learn to follow your plan, manage trades, and journal outcomes.

📐 How to Calculate "R" (Result in Risk Units)

"R" stands for Risk units. It tells you how much you won or lost relative to your initial risk.

If you risked ₱500 and made ₱1,000 profit → Result = +2R
If you risked ₱500 and lost ₱500 → Result = -1R
If you risked ₱500 and made ₱250 profit → Result = +0.5R

📊

R-Value Calculator

Risk Amount (₱)

Profit/Loss (₱)

📊 Paper Trading Log

#	Asset	Dir	Entry	SL	TP	Exit	Result (R)	What I Learned
Ex	EUR/USD	↑	1.1000	1.0950	1.1100	1.1080	+0.8R	Closed early at resistance
1		↑
2		↓
3		↑
4		↓
5		↑
6		↓

📈

Performance Tracker

Total Trades

Winning Trades

Losing Trades

💭

Reflection Questions (7C)

1Did you follow your plan on every trade? If you deviated, what happened?

2What emotions did you feel during these trades (even with fake money)?

🕐

Exercise 7D

Time-in-Trade & Session Analysis

Understanding When to Trade and Overnight Costs

🎯 Objective

Understand market sessions (forex) and timing (crypto), and calculate potential overnight costs if you hold trades.

🌍 24-Hour Forex Session Timeline (Manila Time / PHT)

00:0004:0008:0012:0016:0020:0024:00

Sydney

Tokyo

London

Sydney (5AM - 2PM)

Tokyo (7AM - 4PM)

London (3PM - 12AM)

New York (8PM - 5AM)

Checking current session...

⭐

London-NY Overlap — The Golden Window

Highest liquidity and volatility. Best time to trade major pairs.

8PM - 12AM PHT

⚠️ Leverage vs. Liquidation Distance

Higher leverage = smaller price move needed to liquidate your position

50%

Safe for beginners

20%

Moderate risk

10x

10%

High risk

20x

Very dangerous

💀

Liquidation Price Calculator

Entry Price

Leverage (x)

Position Direction

💭

Reflection Questions (7D)

1Based on your daily schedule, which forex session(s) are most practical for you to trade?

2Would you use 10x leverage as a beginner? Why or why not?

🎯

Final Reflection

Chapter 7 Wrap-Up

1What's the most important thing you learned in Chapter 7?

2On a scale of 1–10, how confident do you feel about planning and placing trades now?

1 = not confident at all, 10 = very confident

3What's ONE habit you'll commit to building before going live with real money?

✅ Workbook Completion Checklist

0/8

✓

Exercise 7A: Planned 4 trades (2 long, 2 short) using Long/Short Position tool

✓

Exercise 7B: Calculated position size for all trades using a calculator

✓

Exercise 7C: Placed at least 6 paper trades (3 long, 3 short)

✓

Exercise 7C: Journaled all trades with entry reason and lessons learned

✓

Exercise 7D: Identified best trading sessions for my schedule

✓

Answered all reflection questions honestly

✓

Understand the difference between LONG and SHORT positions

✓

Committed to 2+ weeks of paper trading before going live

🎉

Congratulations on Completing Chapter 7!

You've now learned how to:

✅Plan long and short trades visually using TradingView

✅Calculate proper position size to manage risk effectively

✅Practice safely using Paper Trading before risking real money

✅Understand market sessions and optimal trading times

✅Calculate risk-to-reward ratios for better trade decisions

✅Understand leverage and liquidation risks

🏃‍♂️ Trading is a marathon, not a sprint.

Keep practicing on Paper Trading for at least 2 weeks before considering live trading.
Build your confidence, discipline, and skill first.

❓ Frequently Asked Questions

At minimum, 2 weeks of consistent paper trading with positive results. However, many successful traders recommend 1-3 months. The goal is to develop consistent habits and prove your strategy works before risking real capital.

Win rate alone doesn't determine profitability. A trader with 40% win rate can be profitable with good risk-to-reward (e.g., 1:3 R:R). Focus on your expectancy: (win rate × average win) - (loss rate × average loss) being positive.

For beginners, staying at 1% or below is strongly recommended. Even experienced traders rarely exceed 2-3% per trade. The goal is to survive losing streaks (which are inevitable) while your account grows over time.

High leverage isn't inherently bad, but it amplifies both gains AND losses. For beginners, lower leverage (2x-5x) is safer because it gives your trades more room to breathe before liquidation.