What is Position Trading?

Trading Penny Stocks - What is Position Trading?

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About a week or so ago, I was asked to divulge the doing results of a new client's trading portfolio for the Year 2006. After a quick scan of what I saw it was determined to me that this trader tried to trade everything, and in every separate time frame, more often than not to the devastation of his trading list balance.

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He had made many day trades (a style of trading where all positions are open and ended before the end of the trading day), a amount of swing trades (a recipe of trading where one takes a position for some days to some weeks), and many others that fit into the class of actual long-term investments rather than actual trades, and others still that were held for shorter periods of time.

The first query I asked of him after viewing his results was "What type of trading is your main focus?" He looked at me and replied, "Well, position trading, of course! I find trades to take and open positions in them until I sell them." The funniest thing about his criticism was that he was dead serious; he truly idea he was a position trader.

Needless to say, but to most experienced traders, and even a large measure of beginners, it is determined that this trader needed some serious help with his trading. Luckily, after some deep discussion I helped him contemplate that he unmistakably needed to find a specific trading style that fit his personality and to stick with only that style and time frame until his trading results improved.

Turns out he prefers swing trading and signed up for our swing trading assistance that we offer online at SolerInvestments.com, swearing he'll stick only to this style as we teach him how to trade successfully first before he ultimately ventures back into other types of trading such as position trading or day trading.

But, what unmistakably is position trading? Using stocks as an example, when you select to come to be a position trader, you are essentially saying, "I am going to be buying stocks and retention them for an extended duration of time. My plan is to hold this position with a longer term outlook, regularly from three months to a year."

When position trading, you are Not buying this stock to sell it off later today, you are Not buying this stock with the hopes of taking behalf from it within a consolidate of days or weeks. You are Not development a buy and hold speculation buy in this stock and planning to sell it a few years from now.

Position trading is similar to swing trading, but with a longer time horizon. Position traders hold stocks for a time duration everywhere from three months to a year. These traders seek to recognize stocks where the technical trends and/or the fundamentals prognosis of a stock suggests a inherent large movement in price is likely to occur, but which may not be fully played out for some months.

As with any type of trading, you must know what you are planning to do with a trade, Before entering the position. If your decision is to be a position trader, don't let your trades turn into whatever but a position trade. I can't stress how foremost this is in trading, it unmistakably can be the disagreement between development it in trading or going broke.

The more times you let any trade, position or otherwise, turn into whatever other than what you planned it to be, the more times you're failing to succeed your plan, and without a plan you are bound to fail.

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