position trading

Position trader:

A position trader is someone who holds a position, usually stocks, for the long term; from week to month, and eve years. 

Position trader do not trade actively and the fewer trades they make in a years, the closer they are to becoming buy and hold long term investors.

Why investors use position trading:

The basic tenet of stock market analysis is that stock move in trends. Once a trend starts, it is likely to continue. Trader make profits by recognizing a trend early, buying a stock for the duration of the trend, and selling as soon as it has run it's course. Both position trading and swing trading are based on trend following; the difference is in the trends duration.

Position traders will look at long term analysis such as the 300 day moving average to identify the primary trend. 

Position trading for everyone?

All investors and traders should match their trading style with their own personal goals, and each style has its pros and cons. The first consideration must be the reason you are investing in first place.

Summary 

As with seemingly everything in the financial arena, the strategy of position trading comes with upside and downsides. 

Many individuals find the possibility of realising sizable gains through catching a trend attractive, while others are leery of being exposed to possibility of a widespread financial collapse.