Position Trader Definition – What is Position Trader? | CFI

position trader

Position traders, sometimes also known as “buy and hold” traders, employ the longest-term trading style out of all trading styles, and may hold their trades for months or even years. This trading approach is reserved for individuals with an excellent understanding of the fundamentals and are very patient.

 

Fundamental themes rather than technical analysis take the centre stage when analyzing the market, and these position traders seek to understand how economic data will dictate the long-term trends of the instrument they are trading.

 

Those who prefer to postpone early profits in favor of a greater upside are well suited to position trading. The style requires that you have a thick skin and absolute trust in your analysis so that you can remain calm and weather short-term market volatility when your trades seem to be going against you. However, it is also a style that often requires large capital reserves to withstand several hundred pips of drawdown without receiving a margin call when the market turns against you.

 

Key takeaways:

 

  • Identifying a trend is the main task for a position trader.
  • They often make a small number of trades over a year.
  • Because small price fluctuations are not considered relevant, there is minimal monitoring or maintenance needed for such a trading style.
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We would like to remind that while we endeavour to provide best possible services, CFI provides execution only services and any information, reports, opinions, commentary or other materials he receives from CFI directly or from its employees or through any analytical tools provided to him or third party research provided to him from the Company shall not be deemed as investment advice and it cannot be relied upon to make investment decisions. The Client commits to make his own research and from external sources as well to make any investment. The Client accepts that CFI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The contents of any report provided should not be construed as an express or implied promise, as a guarantee or implication that clients will profit from the strategies herein, or as a guarantee that losses in connection therewith can, or will be limited.


Forex and CFDs are leveraged products that incur a high level of risk and a small adverse market movement may expose the client to lose the entire invested capital. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and be aware of trading risks. Credit Financier Invest (Mauritius) Ltd provides general information that does not take into account your objectives, financial situation or needs. The content of this website must not be interpreted as personal advice. Please ensure that you understand the risks involved and seek independent advice if necessary.

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