Stepping away from what many deem to be obvious active trading, position trading has links to a “buy and hold” approach to the market.

That being said, there is probably a little more to position trading than what immediately meets the eye.

Position trading — when done by someone with appropriate knowledge and experience — can be seen as a form of active trading, albeit an alternate variation at that.

Position trading means that you are using long-term charts in order to read the markets, with these charts covering time periods ranging from days to months.

This is then combined with other trading tools that help determine the way the market is currently moving and set to move in the future.

The Point is “Riding the Wave”

Because of its “long-term” approach, position trading options can last anywhere from several days to several weeks and beyond, dependent on the current trend.

Engaging in position trading means looking for successively higher highs or lower lows to determine the trend afoot.

Riding the “wave” is key to success, as a trader can benefit from both the dips and peaks of the market.

Position traders attempt to not determine price levels per se but simply market direction, thus opening the door to jump on a trend after it’s in full flow.

From there, it’s all about timing the exit for when the trend breaks.

In terms of difficulty, position trading can be challenging, especially during periods of high market volatility, as potential positions are minimized.

Position trading means that you are using long-term charts in order to read the markets, with these charts covering time periods ranging from days to months.