Position trading is about holding a long-term position for an extended period of time.
Sometimes, traders can keep their orders open even for a year.
The main idea of this trading technique is to secure a trade from the short-term market volatility and allow traders to forecast the long-term trends.
Professional traders may rely on technical analysis and identify periods of resistance and support for their chosen assets, as they lay in the core of this strategy.
Advantages of Position Trading are:
- Fewer trading positions compared to other techniques
- Higher potential profits
Disadvantages of Position Trading are:
- Requires patience and it is more time-consuming to identify when to close the position
- Increased risk exposure
Most trading techniques have their strengths and weaknesses.
However, robust strategy and analysis are required to reduce possible risks.
Join IronFX, the award-winning multi-asset broker, and receive exclusive market forecasts and analysis for free.