Position Trading
Hold positions for weeks to months. Capture long-term trends.
The lowest stress strategy. High patience, low frequency.
What Is Position Trading?
| Aspect | Value |
|---|---|
| Holding period | Weeks to months |
| Targets | 20-100%+ |
| Frequency | 1-5 trades/quarter |
| Stress | Low |
| Focus | Direction, patience |
Best Markets for Position Trading
| Market | Why |
|---|---|
| Indices | Long-term upward bias |
| Blue chip stocks | Sustainable trends |
| ETFs | Diversified |
| Crypto | High volatility |
Position Trading Setup
1. Trend on Monthly
- Monthly in uptrend
- Key level holds
- Entry on monthly confirmation
2. Support Bounce
- Price tests major support
- Reversal signal
- Position entry
3. Breakout Confirmation
- Monthly breakout
- Retest holds
- Long-term entry
Position Trading Process
Monthly Analysis
- Check monthly trend
- Mark yearly levels
- Identify year setup
Wait for Entry
- Quarterly setup forms
- Enter on monthly close
- Large stop (5-10%)
Manage
- Trail monthly
- Review quarterly
- Exit on reversal
Entry Rules
Criteria:
☐ Monthly trend up
☐ Key level holding
☐ Entry signal forms
☐ Monthly confirmation
Risk Rules
| Rule | Value |
|---|---|
| Max risk per trade | 3-5% |
| Max drawdown | 15-20% |
| Max positions | 2-3 |
Position Trading Checklist
☐ Quarterly analysis
☐ Monthly trend
☐ Key levels
☐ Entry timing
☐ Long-term target
Common Mistakes
1. Early Entry
Problem: Entering before confirmation.
Result: Drawdown, doubt.
Fix: Wait for monthly close.
2. No Patience
Problem: Exiting too soon.
Result: Missing big moves.
Fix: Let trends develop.
3. Overleveraging
Problem: Big size, big drawdown.
Result: Can’t hold.
Fix: Small size, hold position.
Key Takeaways
- Weeks-months — Long-term holding
- Monthly timeframe — Direction
- Lowest stress — Minimal management
- High patience — Required
- Big targets — 20%+
Related
swing-trading.md >>>
Position for the big move.