Dec 18, 2019

While there are many types of forex trading strategies in the market, position trading strategy has always been among the most common to forex traders. Position trading is definitely for patient people. The longer you wait, the sweeter the fruit. Position trading can be a great way to make huge profits every month. So if you want to know whether you have what it takes to be a position trader, let’s dive into the details of this trading strategy.

Position trading

What is this forex trading strategy?

Position trading is a long-term buying and holding transaction (securities, currencies, assets, etc.). This term mainly refers to forex and securities trading. Traders trading in Position trading style are called Position traders.

For forex investors, a position of their trading can hold from weeks to months or years.

For stock investors, a Position trader usually holds stocks from 1 year to tens of years.

In case you're interested:

Features of Position trading

Position trading is in stark contrast to Price Action and Day trading (short daily trades). Position traders are almost uninterested in the short-term fluctuations of the trading instruments.

To make a transaction, the Position trader will research and thoroughly understand the issues and information related to the goods they buy. When the purchase is completed, it can be said that they almost forgot, only occasionally interested to watch and wait until the time to achieve the expected profit level to sell.

Position traders often only use fundamental analysis to make trading decisions. Forex indicators are only used in addition to determining a long-term trend.

Position trading is more often applied on the stock market than the forex market.

Traders only trade this style when they have a lot of capital and invest a little bit of each place, each commodity a little, while diversifying risks and eating well when the market is on the right track.

Risks to Position traders

Because long-term trading is like buying and holding, the trader's capital is buried in that trade. If they closed the capital withdrawal midway, it would be considered to break all the original plans set out and not achieve the goal.

Because the market is always unpredictably volatile, if unfortunately the price goes against the prediction trend, that transaction will suffer heavy losses, at least, it will be buried with capital and no profit.

Who is suitable for Position trading?

Position trading is long-term trading. So, first of all, you need to have patience. When you deeply believe in your analysis, you’ll have to wait for the outcome. You must be able to remain calm and cool when things go wrong. Don’t lose patient to quickly or all the hard work would be in vain.

Position trading

Moreover, you have to take forex trading serious. Position trading is for serious traders who decide to make trading their main source of income and even a career. When you’re ready in mind, you have to make sure the market you’re following is a bull one. Or else, failure is the only destination. Therefore, to be a position trader, make sure you have all the skills and experience to give correct predictions.