is position trading?
is a trading approach that aims to profit from the medium to long
term trends in the financial markets. Moreover, it is a prolonged
swing trading that goes beyond the medium term. A typical position
remain in place for a quarter or year. Though it is a type of
investments, it does not last more than
core investing. Note that a typical investment may last for four
years or more.
masters are the hedge
big financial institutions (banks) and private professional
group is also subdivided
Technical position traders
who use advanced
technical trading tools such as
Elliott wave principle market forecast,
the surge in trading volume,
predictive fractal patterns,
and other proprietary trading systems.
a position trader is a fundamental traders. He or she does not
primarily rely on technical indicators such as MACD, stochastic, RSI,
price patterns or the advanced technical trading tools like
the technical position traders.
fundamental traders use the fundamentals such as the balance sheet,
financials, economic news, market sentiment, market indicators,
factors and the central banks' policies to put in place a resilient
position trading strategy.
Trading Example One
about how to position trade as
technical trader. Indeed a technical position trader often uses three
the quarterly chart (for the trading set-up)
three-day chart (for the trading signal)
and the three-hour chart for the trade entry.
that others technical traders also use the same method with the
following time frames:
weekly and four-hour charts or
three-day and four-hour charts.
a professional position trader, one will validate the quarterly
technical trading set-up
on the yearly chart before waiting for clear cut trading signals on
Trading Example Two
is about how to position trade using the fundamentals.
the bearish financial crisis of 2008, the US
Federal Reserve began a never seen before devaluation of the US.
the start of 2009 (quantitative easing or low interest monetary
wealth managers transferred funds into other favourable
the world (Brazil, Switzerland, Japan and China). They also bought
commodities (such as gold and silver) and US
blue chip stocks.
Moreover, smart position traders who spotted the bullish money flow in those
sector timely took positions
selling the US
that those position trades were very profitable as the long term
investors also took positions.
does not become a competent position
trader by chance alone or by skipping the ultimate basics of a
professional position trading requirements such
Thorough understanding of how the financial markets work (outflows
and inflows of money in the markets).
Thorough understanding of each group of financial
Hands on grasp
of market cycles.
In possession of large sum of money to survive the drawbacks in this
Ability to recognize overbought or oversold assets before it is too
A disciplined solid money management.
A sharp competence in market timing without which one may be right
The ability to adopt a robust defensive position trading strategy or
Be humble to accept losses before they grow big.
Being ready to harvest profit in due course without leaving too much
money on the table.
a top-down trading method (for technical position trading).
Be able to combine the technical analysis and fundamentals.
13/ Adopting the mindset of the professional position traders and deploying
the tools that they use in the financial markets.