What Is a Position Trader?

A position trader buys an investment for the long term in the expectation that it will appreciate in value. This type of trader is less concerned with short-term fluctuations in price and the news of the day unless they alter the trader's long term view of the position.

Position trade🥀rs might be seen as the opposite of day traders. They do not trade actively, with most placing fewer than 10 trades in a year.

Understanding the Position Trader

Position traders are, by definition, trend followers. Their core belief is that once a trend starts, it is likely to continue fo🌱r some time.

A distinction can be made between position traders and 澳洲幸运5官方开奖结果体彩网:buy-and-hold investors, who are classified as 澳洲幸运5官方开奖结果体彩网:passive investors and hold their pos🥃itions for even longer periods than do♍ position traders. The buy-and-hold investor is building a portfolio of assets for a long-term goal, such as retirement. The position trader has spotted a trend, made a buy based on that trend, and is waiting for it to peak in order to sell.

This trading philosophy seeks to exploit the bulk of a trend's upwards move. As such, it is the polar opposite of 澳洲幸运5官方开奖结果体彩网:day trading which seeks to take advantage of short-term market fluctuations. In between these two are the 澳洲幸运5官方开奖结果体彩网:swing traders, who might hold an investment for a few weeks or months because they beꦑlieve it will soon see a price pop.

Tactics for Position Traders

To be successful, a position trader has to identify the right entry and exit prices for the asset and have a plan in place to control risk, usually via a 澳洲幸运5官方开奖结果体彩网:stop-loss level.

Position traders may use technical analysis, 澳洲幸运5官方开奖结果体彩网:fundamental analysis, or a combination of both to make their trading decisions. They also rely on 澳洲幸运5官方开奖结果体彩网:macroeconomic factors,🤡 general market trends, and hꦕistorical price patterns to select investments which they believe are about to go higher.

A big advantage of position trading is that it doesn't take a lot of time. Once a trade has been initiated and safeguards have been implemented it's a matter of waiting for the desired outcome.

The main risk is that minor fluctuations that a trader chooses to ignore can unexpectedly turn into 澳洲幸运5官方开奖结果体彩网:trend reversals. Another drawback is that it ties up money for a prolonged period of time, possibly causing 澳洲幸运5官方开奖结果体彩网:opportunity costs.

Is Position Trading for You?

All investors and traders must match their trading styles🦩 w✃ith their personal goals, and each style has its pros and cons.

The first consideration is the reason you are investing in the first place. Are you building a nest egg for the future? Do you plan to make a living by trading? Or do you simply enjoy dabbling in the market and want to own a piece of a company? And how much time do you want to devote each week or each day to tracking your 澳洲幸运5官方开奖结果体彩网:portfolio?

Position trading is ideally suited to a 澳洲幸运5官方开奖结果体彩网:bull market with a strong trend. It doesn't lend itself easily to a 澳洲幸运5官方开奖结果体彩网:bear market. In a period in which the market is flওat, moving sideways, and just wiggling around, day trading might have the advantage.