What are positions in trading?

A position is the expression of a market commitment, or exposure, held by a

trader. It is the financial term for a trade that is either currently able to incur a profit or a
loss – known as an open position – or a trade that has recently been cancelled, known
as a closed position.
For someone with very little knowledge of forex or trading as a whole, the terms order,
trade, and position all probably sound quite similar and may seem to pretty much be the
same thing. However, for those of us that have actually traded before, we know that there
are a few differences between them.

Orders

Basically, the term “order” refers to how you will enter or exit a trade. There are different
types of orders that can be placed in the forex market.

Order Types:

Orders fall into two buckets:

1. Market Order - an order instantly executed against a price that your broker has
provided.
2. Pending Order - an order to be executed at a later time at the price you specify.

Trades

A trade is simply the act of putting on a buy or sell order and executing it. As soon as the
order has been executed, it is now a trade.

Trades comprise of both buy and sell trades, but buying when you are expecting the
markets to rise and selling when you are expecting the market price to fall.

Positions

Position is basically an accumulation of all the open trades at any moment in time. Your
position is based on the exposure that you have with any given currency within a market.

It is the net effect of all your trades.