Definition:
Position trading is a long term style of trading where trades are held for anywhere from several days to several months. This style of trading is the style of trading that most long term investors fit into, but many of them do not utilize positions trading to its full potential. Position trading uses long timeframe charts, including daily, weekly, and monthly charts. Chart based position trading really only includes one type of trade :
- Trend Trading - Long term trades that may last anywhere from several days to several weeks, or even longer if the trend continues, with profit targets of several hundreds of ticks. Trend trading is performed using a graphical chart, with or without indicators, with trades following the current market direction.
Position trading is probably the most common trading styles, as it includes the general public buying and holding onto stocks, regardless of the market's direction. Position trading is also performed using fundamental information, such as earnings reports and other financial news.
Also Known As: Long Term Trading, Buy and Hold Trading
