Tag: spread trading

Spread trading is a type of trading strategy that aims to capitalize on small market price movements by simultaneously taking a long and short position on different markets or different contracts with different expiration dates. This strategy requires an experienced trader who can accurately predict future market trends. Spread trading is a great option for investors who are looking to minimize their risk as well as maximize their profits. It also allows for diversification across different markets and instruments, as well as the ability to quickly react to changing market conditions.

Capital

Capital Market Line: How Forex Trading Works

Capital Market Line: How Forex Trading Works
4 min read

The Capital Market Line (CML) is a graphical representation of the relationship between expected risk and expected return for a portfolio. The CML can be used to evaluate Forex investments in terms of their expected risk and return. The line shows the efficient frontier, based on the risk-free rate of return and the expected return (in this case, Forex exchange rate returns) of the market portfolio. The CML will help traders understand the risk-return profile of different Forex investments, and use that knowledge to select the best financial instruments for meeting their investment objectives.