The Full Set of Forex Trading Orders

• What is a Trading Order?

A trading order is an instruction to your broker to buy or sell a financial asset on your behalf. The order-driven system in all modern exchanges automatically matches buyers and sellers.

The proper use of a trading order adds control to your positions and significantly reduces risk and trading costs. Different brokers may offer different sets of trading orders, and therefore, when choosing a broker, you must ensure that the full range of trading orders is available.

This article presents three basic investment concepts and a series of significant portfolio management ratios.

Three Basic Investment Concepts

• risk-free rate
• standard deviation
• max drawdown

(i) Risk-Free Rate

The 'Risk-Free Rate' refers to the annual return that an investor can secure without taking any market risk. Usually the 'Risk-Free Rate' is calculated based on the annualized interest paid by holding a three (3) month treasury bill. Any investment offering lower returns than this guaranteed rate is considered an unacceptable investment.

• In the EU, the 3-month Euribor is used
• In the USA, the 3-month US Treasury bill