What is position trading?

Position trading is pretty much the opposite of day trading. A position trader is generally less concerned about the short-term drivers of the prices of an asset and market corrections that can temporarily reverse the price trend. Position traders place more emphasis on the long-term performance of an asset.

How do position traders target profits?

As with most approaches to trading we’ve covered here, position traders can utilize a huge range of different trading strategies to target profits. Let’s examine two: carry trades and trend trading. The carry trade is a popular trading strategy in the forex market for position traders, using interest rates to target long-term returns.

How do I choose a position trade?

If you’re considering position trading, you’ll need to identify trades that offer a large amount of potential upside over a long period. Most position traders will do this using fundamental analysis, examining the facts and figures surrounding each market to try and find underpriced assets.

What is the difference between a day trader and a position trader?

A day trader buys and sells within hours or minutes. A position trader buys and holds until a trend peaks. A buy-and-hold investor buys for the long term. Position traders may use technical analysis, fundamental analysis, or a combination of both to make their trading decisions.