Business, Legal & Accounting Glossary
Position trading is a long-term trading strategy that can involve trades that may last for months or even years. The definition quite much explains that a position trader is a patient trader who has the capacity to wait and watch rather than rushing into things.
Becoming a position trader requires a great deal of patience and understanding of the market. One must have the ability to analyze and presume the currency-market trends and how the economy will affect a country in the future.
Position Trading is not as easy as you may think. One must put aside his emotions and worries when it comes to losing money. Because of the long-term trading, your losses may be quite large and it will require some time before you recover them. So, you should have thick skin in order to bear the results when the market goes against you, which is almost guaranteed.
For position trading, it is necessary that you’ve got enough capital. You will have to encounter strong hits and be confident about your analysis to stay cool during bad times.
You have the ability to think and act independently. You should be confident enough to believe in your analysis of market trends and ignore the suggestions of other people. You are a good guesser and analyst of market flow and fundamentals. You have thick skin so that you can bear huge losses in position trading. You are well-capitalized to remain unaffected even after several strong hits. You don’t mind waiting for your big reward and don’t rush into things. Position trading, long-term trading, allows you to make hundreds to thousands of net pips. But if you are one of those who get excited about 50 pips, go for the short-term trading. You are extremely tolerant and cool-minded.
You are impressed by the leading opinions about the market, represented by the majority of the traders. You don’t have any understanding of how fundamentals affect the trade market in long-term trading. You are not patient enough. Position trading requires a lot of patience and even if you are a little bit patient, long-term trading won’t work for you. You are not well capitalized and can’t risk taking huge swings. You like to rush into things and can’t wait long enough to get the results.
Now you do know if your personality suits you to become a position trader or not. Make your decision and think thrice before taking any step, because now you perfectly know if you can or can’t be a position trader.
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This glossary post was last updated: 13th November, 2021 | 0 Views.