Traders often bloat with misconceptions as of which strategy would be the ideal one to trade with. The answer is, there is no ideal strategy. Strategies are what we traders build by ourselves to trade. Position trading is one such strategy like day trading which is being widely used by people all over the world. For those who are unfamiliar about position trading, let’s buckle up and get committed to learn some important position trading strategies.

THE BASICS - WHAT IS POSITION TRADING?

Position Trading is usually where a trader enters into a position, holds his instrument until he figures out the right time to sell it. The trade duration may last from several weeks to months, and sometimes, even years. A position trader’s greatest attribute is his patience which helps him stand against the market odds and gain profits.

CHOOSE THE RIGHT INSTRUMENT:-

Since you are about to enter into a position, choose the right instrument to stay on track. Before investing, get to know about the history of the instrument with the help of long-term charts, economic factors and predict where the price would reach after a certain period of time. If you think it might work, you can go ahead with the chosen instrument. It is important that you are strong in your position trading techniques and understand how position trading works.

KNOW WHEN TO BUY OR SELL SHORT:-

Before entering into a position, make sure you do a thorough groundwork, a repeated number of times. Your chances of becoming a successful position trader will likely be higher if you have a good sense of foresight which can be acquired by updating yourself with the market news. Predicting the markets and trading with knowledgeable guesses will help you gain profits.

SET A STOP LOSS - THE LIFELINE TO YOUR TRADING CAREER:-

Certain economic, political factors and events could create a peak difference in the price of the instrument and the aftermath would be either pleasant or unpleasant. But, to be on the safer side, it is always better to set a stop loss to your deal. Stop loss is a feature beyond which your deal doesn’t progress. When the specified target price is reached, the order gets executed minimizing your losses and acts a shield to your career.

GOOD ‘TIL CANCELLED (GTC):-

Position trading requires less effort when compared to other trading strategies. Once you enter into a position, you wait till the instrument reaches the expected price and execute the trade. But monitoring the price fluctuations continuously could be a tiring process. GTC helps you fix the desired price and automatically executes the trade once the target has been reached thus making the overall trading process more comfortable. Manual execution can also be done if you are satisfied with the current price of the instrument.

RISKS INVOLVED IN POSITION TRADING:-

Minor fluctuations that occur in the price of the instrument does not create sensations among position traders. But what if a trend reversal occurs and the market goes against you? Though stop loss if implemented would minimize the losses, it could be a disheartening event for a position trader. A good knowledge and a well-predicted trade deal would avoid all mishaps and losses.

Position trading strategy, one of the best trading strategy can help you earn profits amidst the wild volatile market. Using proper risk management factors and going with the market trends can help you survive in the market.