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Position Trading

Forex Trading Strategy

Position Trading

Position trading is a longer-term trading approach where you can hold trades for weeks or even months.

The time frames you’ll trade on are usually the Daily or Weekly.

As a position trader, you mainly rely on fundamental analysis in your trading (like NFP, GDP, Retail sales, and etc.) to give a bias.

Also, you might use technical analysis to better time your entries.

Let’s say:

You analyze the fundamentals of EUR/USD and determine it’s bullish. But, you don’t want to go long at any price.

So, you wait for EUR/USD to come to Support before taking your position.

Now if your analysis is correct, you could enter at the start of a new trend before anyone else.

An example:

Strategy

Now, let’s discuss the pros and cons of position trading…

The Pros
  • Don’t need to spend much time trading because your trades are longer-term
  • Less stress in your trading as you’re not concerned with the short-term price fluctuations
  • A favorable risk to reward on your trades (possibly 1 to 5 or more)
The Cons
  • Require a firm understanding of fundamentals driving the market
  • Need a larger capital base because your stop loss is wide
  • May not make a profit every year because of the low number of trades

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