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STAGE 01 · Cadet · F02

Your First Safe Practice Trade

Your First Trading Decisions · Chapter F02.5

Risk-first learningIndependent practiceNo membership or sign-in required
Independent student audit copy. This is a read-only copy of the preserved Cadet source lesson. The authenticated learning system remains the authority for assessed Cadet lessons, illustrations and course credit.

CADET · Module F02: Your First Trading Decisions · About 30 minutes

Cadet graduation exercise: This is a paper or demo-only mission. Completing it never requires opening a real-money account or making a deposit.

Your mission today

Connect everything you've learned: identify the market, read a price chart, choose a simple imaginary buy trade, estimate the downside, and write down what happened.

1. Why do we need a plan?

Imagine you are learning to drive. A good instructor doesn't begin by telling you to race faster. They show you the mirrors, brakes and rules, then practise somewhere safe.

Trading also needs a plan. A trading plan is a short written note explaining what you are going to do and why. At Cadet level, it doesn't need complicated indicators or predictions. It needs enough detail that you can read it tomorrow and understand your decision.

For our first exercise, a plan can be only six lines.

2. The six-line Cadet plan

  1. Market: What imaginary product or demo symbol am I looking at?
  2. Time setting: What period does one candle represent?
  3. Observation: Is the recent path mainly up, down or sideways?
  4. Entry: At what price would I pretend to buy?
  5. Exit if wrong: At what price would I plan to leave?
  6. Size and planned loss: How many units, and what is the approximate money loss before costs?

You are not required to make a buy decision. If something is confusing or the planned loss is too large, write “No trade: I need more information.” That is a valid completed exercise.

CADET · PRESERVED CONCEPT FIGUREEducational illustration, not market data
Your First Safe Practice Trade original approved Cadet concept diagram
Original approved Cadet concept visual. For broker-style EURUSD prices, see the interactive chart below.

CADET · PROFESSIONAL EURUSD CHART LAB

Complete a real-style six-line trading plan

Practice-sized EURUSD scenario: hypothetical long entry at Ask 1.08512, 0.10 standard lot and 1 USD per pip. Change the stop distance and examine the downside before the possible target.

Stop distance
Planned reward-to-risk
EURUSD · M15 · Bid candlesSynthetic 5-decimal training prices1.083271.084541.085811.087081.08835123456789101112TARGET BID · 1.08912ENTRY ASK · 1.08512STOP BID · 1.08312PLANNED RISK$20.0020 pips × $1 / pipHYPOTHETICAL REWARD$40.002:1 reward:risk planStops can slip.No outcome guaranteed.Every bar fully closed · 1 pip = 0.00010 · one pipette = 0.00001Not live quotes, not a broker screenshot and not a tested trading strategy

Work the maths

A long opens at Ask 1.08512, and the hypothetical protective stop closes at Bid 1.08312. That is 20 pips of planned price risk at $1 per pip before commission and adverse fill effects.

Do not assume

A 2:1 profit target is a planned price distance, not a success probability. Actual loss can exceed the example after slippage and extra costs.

3. Fill out a complete example together

Imagine a simple pretend share chart, not a CFD or leveraged product.

  • Market: Practice Share ABC (fictional).
  • Time setting: One candle represents one day.
  • Observation: Price has recently moved between about $48 and $52. It appears mostly sideways.
  • Idea: I will simulate buying one share at $50. There is no promise it will rise.
  • Exit if wrong: I intend to leave near $48.
  • Size and planned price loss: One share × ($50 − $48) = about $2 before costs.

Now imagine the price eventually reaches $53 and the share is sold there. Ignoring costs, that produces +$3. If it instead falls and the trade closes at $47, that is −$3, not the planned −$2. The difference illustrates why a stop price is not a guarantee.

A correct trading process can still end with a loss. An impulsive trade can sometimes make money. Do not confuse a lucky outcome with a reliable method.

4. Your first trading journal

A journal is simply a record of decisions. It helps you learn from what actually happened instead of rewriting the story afterward.

After your imaginary trade, fill in:

  • Date and practice market
  • What you saw before the trade
  • What you planned to do
  • What the price did afterward
  • How much you would have gained or lost before and after known costs
  • One lesson learned

If you make a mistake, record it honestly. The purpose is learning, not looking clever.

5. Six common beginner mistakes

Mistake 1: Trading with real money before understanding the buttons. Fix: stay in demo mode.

Mistake 2: Believing a green candle guarantees a rise. Fix: describe what happened; do not claim the future is known.

Mistake 3: Ignoring the spread and fees. Fix: calculate the net result as well as the price difference.

Mistake 4: Choosing a trade size because it could earn more. Fix: work out what it could lose first.

Mistake 5: Keeping a losing trade open without a plan. Fix: decide your exit idea before the trade, while recognising execution risk.

Mistake 6: Believing you must trade today. Fix: write “no trade” if you do not understand the situation.

Your Cadet graduation mission

Use the practice worksheet below and complete three separate examples over three imaginary price paths. One should move up, one down and one sideways. Record your decisions before reading the outcome.

For each, identify market, time setting, direction, entry, exit, size, estimated loss, final outcome and one thing you learned.

Your final pre-flight checklist

  • I know what the product is.
  • I know whether this is demo or real money. For Cadet, it is demo/paper only.
  • I know what the chart's time setting means.
  • I can name the buying and selling prices.
  • I can explain how much the trade might lose in a normal scenario.
  • I understand that actual losses may be worse than my planned stop.
  • I am comfortable choosing not to trade.

What you've earned

You are not being certified as a profitable trader. You have learned the language of the cockpit: what a trade is, what markets mean, how to read a chart, what size does to money, and how to practise without putting your savings on the line.

That is real progress. The next level will teach you how to study price behaviour with evidence instead of guesses.

Student clarity check

Could you explain the idea in your own words, reproduce the calculation and complete the exercise without seeing an instructor's answer? Does the diagram actually show the concept? Please record exact lesson codes and specific points of confusion for the independent Claude audit.