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 traders might be seen as the opp𒊎osite 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 co🌌re belief is ๊that once a trend starts, it is likely to continue for some time.

A distinction can be made between position traders and 澳洲幸运5开奖号码历史查询:buy-and-hold investors, who are classified as 澳洲幸运5开奖号码历史查询:passive investors and hold their positions 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 t🌟rend, 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开奖号码历史查询:day trading which seeks to take advantage of short-term market fluctuations. In between these two are the 澳洲幸运5开奖号码历史查询:swing traders, who might hold ꦗan investment for a few weeks or months because they believe 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开奖号码历史查询:stop-loss level.

Position traders may use technical analysis, 澳洲幸运5开奖号码历史查询:fundamental analysis, or a combination of both to make their trading decisions. They also rely on 澳洲幸运5开奖号码历史查询:macroeconomic factors, general market trends, and historical price patterns to൲ select investments whic🧸h 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开奖号码历史查询:trend reversals. Another drawback is that it ties up money for a prolonged period of time, possibly causing 澳洲幸运5开奖号码历史查询:opportunity costs.

Is Position Trading for You?

All investors and traders must match their trading styles with their per🧔sonal 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开奖号码历史查询:portfolio?

Position trading is ideally suited to a 澳洲幸运5开奖号码历史查询:bull market with a strong trend. It doesn't lend itself easily to a 澳洲幸运5开奖号码历史查询:bear market. In a perioꦜd in which the market is flat, movi🃏ng sideways, and just wiggling around, day trading might have the advantage.