TRADING MANUAL

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TRADING MANUAL

HGMARKETS PVT LTD

AUTHOR: USAMA LIAQUAT (SENIOR RESEARCH ANALYST)

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Table of Contents 1) INTRODUCTION TO FUTURES ................................................................................................................ 4

2) TYPES OF ORDERS ................................................................................................................................. 4

2.1) Market Order ..................................................................................................................................... 4

2.2) Pending Order .................................................................................................................................... 4

2.2.1) Buy Limit ..................................................................................................................................... 4

2.2.2) Buy Stop ...................................................................................................................................... 5

2.2.3) Sell Limit ...................................................................................................................................... 5

2.2.4) Sell Stop ...................................................................................................................................... 5

2.3) Take Profit .......................................................................................................................................... 6

2.4) Stop Loss ............................................................................................................................................ 6

3) HOW TO LOGIN TRADER’S ACCOUNT ................................................................................................... 7

4) FUTURES FUNDAMENTALS: HOW TO TRADE ....................................................................................... 8

4.1) INSTANT EXECUTION ......................................................................................................................... 8

4.1.1) Buy/Sell (Long/Short position) .................................................................................................... 8

4.2) PENDING ORDERS ............................................................................................................................ 10

4.2.1) Buy Limit ................................................................................................................................... 10

4.2.2) Sell Limit .................................................................................................................................... 10

4.2.3) Buy Stop .................................................................................................................................... 11

4.2.4) Sell Stop .................................................................................................................................... 11

4.3) STOP LOSS ........................................................................................................................................ 12

4.3.1) Stop Loss Strategy for Instant buy ............................................................................................ 12

4.3.2) Stop Loss Strategy for Instant Sell ............................................................................................ 13

4.3.3) Stop Loss Strategy for Buy Limit ............................................................................................... 13

4.3.4) Stop Loss Strategy for Sell Limit ................................................................................................ 14

4.3.5) Stop Loss Strategy for Buy Stop ................................................................................................ 14

4.3.6) Stop Loss Strategy for Sell Stop ................................................................................................ 15

4.4) TAKE PROFIT .................................................................................................................................... 16

4.4.1) Take Profit Strategy for Instant Buy .......................................................................................... 16

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4.4.2) Take Profit Strategy for Instant Sell .......................................................................................... 17

4.4.3) Take Profit Strategy for Buy Limit ............................................................................................. 17

4.4.4) Take Profit Strategy for Sell Limit ............................................................................................. 18

4.4.5) Take Profit Strategy for Buy Stop.............................................................................................. 18

4.4.6) Take Profit Strategy for Sell Stop .............................................................................................. 19

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1) INTRODUCTION TO FUTURES A futures contract is a type of derivative instrument, or financial contract, in which two parties agree to

transact a set of financial instruments or physical commodities for future delivery at a particular price. If

you buy a futures contract, you are basically agreeing to buy something that a seller has not yet

produced for a set price. But participating in the futures market does not necessarily mean that you will

be responsible for receiving or delivering large inventories of physical commodities - remember, buyers

and sellers in the futures market primarily enter into futures contracts to hedge risk or speculate rather

than to exchange physical goods (which is the primary activity of the cash/spot market). That is why

futures are used as financial instruments by not only producers and consumers but also speculators.

2) TYPES OF ORDERS Client terminal allows to prepare requests and request the broker for execution of trading operations.

Moreover, terminal allows to control and manage open positions. For these purposes, several types of

trading orders are used. Order is a client's instruction to brokerage company to perform a trade

operation. In the terminal, orders are divided into two main types: market and pending. Besides them

"Stop Loss" and "Take Profit" are available.

2.1) Market Order Market order is an instruction given to a brokerage company to buy or sell a security. Execution of this

order results in the execution of a deal. The price of a deal depends on the execution mode, which

depends on the symbol type. Generally, a security is bought at the Ask price and sold at the Bid price.

2.2) Pending Order Pending order is the client's instruction to a brokerage company to buy or sell a security at pre-defined

conditions in the future. The following types of pending orders are available:

2.2.1) Buy Limit — trade request to buy at the Ask price that is equal to or lower than that specified in

the order. The current price level is higher than the value in the order. Usually this order is placed in

anticipation of that the security price, having fallen to a certain level, will increase;

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2.2.2) Buy Stop — trade request to buy at the Ask price that is equal to or higher than that specified in

the order. The current price level is lower than the value in the order. Usually this order is placed in

anticipation of that the security price, having reached a certain level, will keep on increasing;

2.2.3) Sell Limit — trade request to sell at the Bid price that is equal to or higher than that specified in

the order. The current price level is lower than the value in the order. Usually this order is placed in

anticipation of that the security price, having increased to a certain level, will fall;

2.2.4) Sell Stop — trade request to sell at the Bid price that is equal to or lower than that specified in

the order. The current price level is higher than the value in the order. Usually this order is placed in

anticipation of that the security price, having reached a certain level, will keep on falling;

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2.3) Take Profit Take Profit order is intended for gaining the profit when the security price has reached a certain level.

Execution of this order results in complete closing of the whole position. It is always connected to an

open position or a pending order. The order can be requested only together with a market or a pending

order. Terminal checks long positions with Bid price for meeting of this order provisions (the order is

always set above the current Bid price), and it does with Ask price for short positions (the order is always

set below the current Ask price).

2.4) Stop Loss This order is used for minimizing of losses if the security price has started to move in an unprofitable

direction. If the security price reaches this level, the whole position will be closed automatically. Such

orders are always connected to an open position or a pending order. They can be requested only

together with a market or a pending order. Terminal checks long positions with Bid price for meeting of

this order provisions (the order is always set below the current Bid price), and it does with Ask price for

short positions (the order is always set above the current Ask price).

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3) HOW TO LOGIN TRADER’S ACCOUNT

Following are the steps to login trader’s account

Rollover your cursor to ‘Log In’ tab in the extreme top right corner

Click on Login

Then click of Client Login

Then click on ‘ NEXT Trading Terminal – Login Based’

Following window will upload, insert your Account ID and Password in the top right box to Login your

account.

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4) FUTURES FUNDAMENTALS: HOW TO TRADE

4.1) INSTANT EXECUTION There are following types of instant execution.

4.1.1) Buy/Sell (Long/Short position)

To execute an instant long position (Long) please follows the following steps

Click on ‘FastOrders’ button

A new window will pop-up

Following is the screen shot

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Contract Order Side

Order Type GTC Trader Lots Price (Trigger) Distance

SL Limit Price/St

op

Operation

This tab will provide you the detail of all the available products and their contracts with different maturities

This tab will give the option to buy or sell

This tab will give you the option to select the type of order you want to select. For instant execution click on ‘Market’ and for pending orders select ‘Limit’

GTC is the abbreviation of ‘Good Till Cancelled’ it means your order will remain valid till execution

This bar will show you your account ID

Lots will give the option to select the number of contracts you want to buy or sell. For single contract write ‘1’

This tab is only applicable to pending orders

Not applicable

If you want to submit the trade then click on ‘submit’ button and if you want to cancel the order then click on ‘clear’ button

To execute buy or sell follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select the ‘order side’. If you want to go long then select buy else select sell for short position.

For instant execution click on ‘order type’ drop down menu and select market.

Enter the number/ numeric value in the lot tab. For a single contract enter 1

Click on submit button to execute trade.

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4.2) PENDING ORDERS

4.2.1) Buy Limit

To execute Buy Limit follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Buy from ‘Order Side’ drop down menu

Select Limit from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Buy Limit

4.2.2) Sell Limit

To execute Sell Limit follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Sell from ‘Order Side’ drop down menu

Select Limit from ‘Order Type’ drop down menu

Tick GTC if you want check to this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Sell Limit

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4.2.3) Buy Stop

To execute Buy Stop follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Buy from ‘Order Side’ drop down menu

Select ‘StopLossMarket’ from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Buy Stop

4.2.4) Sell Stop

To execute Sell Stop follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Sell from ‘Order Side’ drop down menu

Select ‘StopLossMarket’ from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Sell Stop

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4.3) STOP LOSS Stop Loss strategy for instant execution

Order Side Stop Loss Strategy

Buy Sell Stop

Sell Buy Stop

Stop Loss strategy for Pending orders

Order Type Stop Loss Strategy

Buy Limit Sell Stop*

Sell Limit Buy Stop*

Buy Stop Sell Stop

Sell Stop Buy Stop

4.3.1) Stop Loss Strategy for Instant buy

To execute Stop Loss strategy for instant buy follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Sell from ‘Order Side’ drop down menu

Select ‘StopLossMarket’ from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Stop Loss

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4.3.2) Stop Loss Strategy for Instant Sell

To execute Stop Loss strategy for instant buy follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Buy from ‘Order Side’ drop down menu

Select ‘StopLossMarket’ from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Stop Loss

4.3.3) Stop Loss Strategy for Buy Limit

To execute Stop Loss strategies for Buy Limit follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Sell from ‘Order Side’ drop down menu

Select ‘StopLossMarket’ from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Stop Loss

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4.3.4) Stop Loss Strategy for Sell Limit

To execute Stop Loss strategies for Sell Limit follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Buy from ‘Order Side’ drop down menu

Select ‘StopLossMarket’ from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Stop Loss

4.3.5) Stop Loss Strategy for Buy Stop

NOTE: Stop Loss strategy for Buy Stop can only be executed after the execution of Buy Stop

To execute Stop Loss strategies for Buy Stop follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Sell from ‘Order Side’ drop down menu

Select ‘StopLossMarket’ from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Stop Loss

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4.3.6) Stop Loss Strategy for Sell Stop

NOTE: Stop Loss strategy for Sell Stop can only be executed after the execution of Sell Stop

To execute Stop Loss strategies for Sell Limit follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Buy from ‘Order Side’ drop down menu

Select ‘StopLossMarket’ from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Stop Loss

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4.4) TAKE PROFIT Take Profit strategy for instant execution

Order Side Stop Loss Strategy

Buy Sell Limit

Sell Buy Limit

Take Profit strategy for Pending orders

Order Type Stop Loss Strategy

Buy Limit Sell Limit

Sell Limit Buy Limit

Buy Stop Sell Limit*

Sell Stop Buy Limit*

4.4.1) Take Profit Strategy for Instant Buy

To execute Take Profit strategy for instant Buy follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Sell from ‘Order Side’ drop down menu

Select Limit from ‘Order Type’ drop down menu

Tick GTC if you want check to this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Take Profit

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4.4.2) Take Profit Strategy for Instant Sell

To execute Take Profit strategy for instant Sell follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Buy from ‘Order Side’ drop down menu

Select Limit from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Take Profit

4.4.3) Take Profit Strategy for Buy Limit

*NOTE: Take Profit strategy for Buy Limit can only be executed after the execution of Buy Limit

To execute Take Profit strategies for Buy Limit follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Sell from ‘Order Side’ drop down menu

Select Limit from ‘Order Type’ drop down menu

Tick GTC if you want check to this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Take Profit

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4.4.4) Take Profit Strategy for Sell Limit

*NOTE: Take Profit strategy for Sell Limit can only be executed after the execution of Sell Limit

To execute Take Profit strategies for Sell Limit follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Buy from ‘Order Side’ drop down menu

Select Limit from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Take Profit

4.4.5) Take Profit Strategy for Buy Stop

To execute Take Profit strategies for Buy Stop follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Sell from ‘Order Side’ drop down menu

Select Limit from ‘Order Type’ drop down menu

Tick GTC if you want check to this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Take Profit

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4.4.6) Take Profit Strategy for Sell Stop

To execute Take Profit strategies for Sell Stop follow the instruction mentioned below

Click on drop down menu of ‘contract’ and select the contract you want to trade.

Select Buy from ‘Order Side’ drop down menu

Select Limit from ‘Order Type’ drop down menu

Tick GTC if you want to check this option

Set number of contract from the “Lot’ Tab

Set the price limit in ‘Price(Trigger) Distance’ tab

Click on submit to execute Take Profit