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27 Feb 2018

SHARE MARKET-- position trading/advantages & disadvantages,

                       Position Trading


The most forgiving type of trading - small mistakes are more easily absorbed in market movement and the size of your eventual profit.

The easiest to learn. It is estimated that up to 25% of position traders learn to become profitable.

Easier to become successful with smaller startup capital.
Much easier to predict the market as in general you will be following the overall trend.
In general position trading is profitable.
Less time consuming than day trading.


Compounding has a lot less effect on profit than both intraday and swing trading.

Because positions can be highly leveraged and trades remain open for extended periods of time, unable to reap consistent benefits of interest.

There is inherent risk in keeping positions open over night. It is quite possible for drastic changes to occur in the market while you sleep.
Money can be tied up for an extended period of time. This can prevent entry into new positions as they arise.
Because of the length of time involved in position trading, traders can experience significant drawdown with the expectation that it will turn around and start trending back in the desired direction. Psychologically this can have a very negative effect.

Position Trading

Position trading is similar to swing trading, but with a longer time horizon. Position traders hold stocks for a time period anywhere from one day to several weeks or months. These traders seek to identify stocks where the technical trends suggest a possible large movement in price is likely to occur, but which may not be fully played out for several weeks or months.

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