What makes this trading style different from others, is that positions are opened for a much longer period – from a few weeks to several years. And chances of a profitable outcome here will depend on a thorough analysis – both technical and fundamental. The quality of your estimates and intelligent choice of opening and closing times of the trade can yield a truly respectable income.
Position trading is pretty close to buy-and-hold investment. It makes you less dependent on the market “wiggling” and some short-term negative factors. You may totally disregard the intra-day or even intra-week movements, thereby cutting off risks that a day trader has to face. This is similar to changing of arms: abandoning incessant shotgun firing and picking up a sniper rifle. Thus choosing to rely more on one’s patience, accuracy and correct choice of a position.
What are the highlights?
The following points will best describe how long-term traders operate:
What do I need to become a position trader?
Benefits and drawbacks of long-term trading
Now let’s consider what this trading style has to offer on the upside, and what are the disadvantages.
Bottom line: position trading might be the style for you, if you are a seasoned trader who does not run after quick profits. Other important criteria include strong analytical and data interpretation skills, backed by a good deal of patience and money resources.