AriaS
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The difference between order, trade and position
Both order and trade are actions. Position is not an action, but a situation.
Order – a request to your broker or platform to execute a trade for you.
Trade – the actual act of buying or selling an asset once the order is executed.
Position – the situation of holding an asset. For example, if you are long on EURUSD and short on USDCAD, you have two positions. Your risk and return are now combined across these two assets. Let’s say your Forex account is in USD. You sold USD to buy EUR, and also sold USD to buy CAD. So you are now holding two assets: EUR and CAD. Together, this forms part of your portfolio, and you should know the risk and projected return of that portfolio.
