What is position trading in Forex?

Position trading is characterized by longer holding periods than other forms of trading. As a result, there is a higher chance of success, but also a higher possibility for profit. Many of the world’s wealthiest investors throughout history have amassed their fortunes through position trading.

In one of his most recent newsletters, trader Joe Ross described what may be the longest example of position trading in history, one that lasted nearly ten years (from 1991 to 2000). The investor in issue opened a long-term position in the S&P 500, which he held for a long time, making a profit of $16 million by using a trailing stop that was triggered only when he felt a sufficient profit had been made.

In addition to being a superb investor and drawing a significant following of admirers like Warren Buffet, Philip A. Fisher was also a well-known position trader who was known for his focus on good firms with very optimistic statistics. Fisher made a long-term investment in Motorola stock in 1955, and he held on to it until his death at the age of 96.

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Also known as pyramiding. This was one of the key factors that distinguished the success of Richard Dennis and later his Turtle Traders. Its a tactic which can make the difference between being a trader with some winning trades and being a winning trader.

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Frankly, this type of trade setup will work in (only) long-trend based market! You’ll suffer during short trend based market!

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The higher the TF, the better chance of succeeding with this strategy. Many pro traders open positions on the weekly and monthly charts. Using a 20EMA which price action movement is buying above and selling below.

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If you decide to trade with Position Trading strategy then you must know that you will have to hold a position for an extended period of time, usually months or years. Also you must disregard short-term price fluctuations in favour of more precise fundamental analysis and long-term trends.

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