Position trading is a stress-free trading strategy as the traders trade the higher time frame in the market. It is called position trading because the traders in forex are always holding the position of their trades in the market. Most of the times, these trades are open for months and weeks. This strategy is also very safe when you are wanting to protect your trades from the market volatility of Forex. If you look at the professional Aussie traders then you will find lots of position traders in the market. However, in order to make consistent profit in the online trading world, you must have a very clear understanding of the basic of the forex market. So make sure that you learn the art of fundamental and technical analysis perfectly before trading with real money.
As trades are open for many days and sometimes months, short time fluctuations in the market cannot affect the trades in position trading. This is one of the reasons t this strategy is getting popular. Another reason is that, in position trading, traders do not need to analysis the market every day. They can keep some trades in the market and wait for the market movement to remove the odds in the trend and favor their trades. This trade is done in long term process and most of the time it is the traders who get profit from the market outcome. Short term fluctuations do not affect the profit in this strategy.
Is it good or bad?
All the strategies in Forex are good if you can use them properly. Most of the time, strategies target the Forex market to get profit from the trades. As a long-term trading strategy, position trading is safer than the other strategies in the market. You get a long of a time to give your trades and the market may turn to your favor and give you profit. Also, if the price direction is going on other way, position traders do not close their trades with the loss. They keep the trades open and the market may move in the other way onwards. In this way, position trading benefits the traders in the market.
Although position trading is good, it is not used by professional traders. It takes weeks and even months to get a result from the trades. It is also very long-time trading strategy. If you want to make a profit in short time, you better follow other strategies. However, if you consider trading as a part-time profession then you become a position trader and look for trading signals in your trading platform once in a day. Once you find the perfect trade setups executes the trades with proper risk management factors and let the market do its duty. But when you place any trade make sure that you trading in favor of the long-term prevailing trend as it increases the percentage of your winning.
Trading is all about probability. As a full-time trader, you will always have some losing trades in the market. So make sure that you learn to embrace the losing orders in the market. Never trade the market based on your emotions rather use your rational logic to place the trades. Always focus on quality trade execution and do the analysis in the higher time frame. Try to master the art of fundamental analysis as it will give you a precise idea of the strength of the prevailing trend of a certain asset.
Summary: Every strategy in Forex can be successful and profitable for traders if they are used right. If you want to trade in forex, make sure you know the position trading strategy very well. As this strategy use a long-term trading method, you are like to be out of short-term market fluctuations in the market and keep your money safe in market volatility.