Education · Part 1 of 3
Trading basics
Everything on YOLO builds on a handful of ideas. This guide covers them in plain English — no prior knowledge assumed.
Markets and instruments
A market is anywhere buyers and sellers exchange an asset: shares (AAPL, VOD), indices (FTSE 100, S&P 500), currencies, commodities. The price you see is simply the last level at which a buyer and seller agreed to deal.
UK retail traders typically access markets three ways:
| Instrument | What it is | Key risk point |
|---|
| Spread bet | A bet of £X per point of price movement. Tax-free in the UK; expiry styles include DFB (“daily funded bet”, rolls over daily). | Leveraged — small moves against you cost real money fast. |
| CFD | A contract paying the difference between open and close price. | Leveraged, like spread bets. |
| Option | The right (not obligation) to buy or sell at a set price by a set date. | Bought options can expire worthless; risk is capped at the premium. |
Going long and going short
- Long — you profit if the price goes up. The classic “buy low, sell high”.
- Short — you profit if the price goes down. You sell first and buy back cheaper later.
Every YOLO signal states its direction: LONG or SHORT. The strategy engine then builds positions whose payoff matches that view.
Order types
- Market order — execute now at the best available price. Fast, but the fill price can differ from the quote (“slippage”).
- Limit order — execute only at your chosen price or better. You control price, but might not get filled.
- Stop-loss — an order that closes your position automatically once price moves against you to a level you chose. The single most important risk tool a trader has.
Reading a signal
A typical expert signal looks like:
LONG AAPL — entry 195.00 · stop-loss 188.00 · target 210.00
- Entry — the price at which the expert thinks the trade is worth taking.
- Stop-loss — where the idea is wrong; exit and take the small loss.
- Target — where the expert plans to take profit.
The distance from entry to stop, versus entry to target, gives the risk/reward ratio. Risking 7 points to make 15 is a ratio of roughly 1:2 — you can be wrong half the time and still come out ahead.
Position sizing — the part most people skip
Position sizing answers “how much should I put on this trade?”. The professional rule of thumb: risk no more than 1–2% of your account on a single trade. With a £5,000 account and a 2% rule, your maximum loss per trade is £100 — so the stake is set so that hitting the stop-loss costs about £100, never more.
This is exactly the arithmetic YOLO does for you: every setup is sized against your risk profile, and the maximum loss is shown in pounds before you confirm.
Where YOLO fits
Experts supply the idea (entry, stop, target). YOLO turns it into a defined-risk position sized for your account, and shows you the worst case before you commit. You make the final call on every trade.
Next: Options Strategies — how options let you cap your risk in advance.
