by Ankita Lodh on 26 June 2024, 2 minutes and 44 seconds min read
Stock markets and volatility are like the two sides of a coin that cannot be separated. If you are a trader, one thing that you cannot avoid is the daily fluctuations of the stocks and tracking them rigorously to make a profit. But what if you lack the time to monitor the daily charts but aren’t willing to make long-term investments? Position trading might be your solution apart from using the top trading app in India.
Among different trading strategies, position trading is mostly preferred by medium-term traders. Let’s understand this trading technique in detail.
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Positional trading means instead of buying and selling units on the same day in intraday trading, traders hold their position and maintain it for more than a day. The holding position can be for a week or a month.
The primary goal of position trading is to spot the bigger picture of the economy and analyse market sentiment to make profits on long-term market direction. For this reason, instead of tracking daily fluctuations, traders keep an eye on the overall trends in the market, company fundamentals, and economic situations.
Source: forextraininggroup
Let’s understand the concept of position trading with an example. Suppose you want to buy shares in an auto company and try position trading techniques to make profits. You chose to buy and hold the stock for a month because you are confident that the stock will go up after the company’s quarterly results.
This decision is based on the previous performance, which states the company performed well after the past quarterly result, and you decided to enter the trade and hold the position until the earnings release takes place.
This trading technique is what we call position trading. With this strategy, traders don’t need to track market volatility on a daily basis but rather the long-term trends in the market.
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Now that we have a clear idea of what position trading is, let’s have a quick look at the perks and drawbacks you might get when exercising position trading on the best share market app.
While the pros are many, position trading also comes with some drawbacks that you need to be aware of.
In beginner stock market tips, exercising position trading strategy is about how patient and disciplined you are throughout the trade. Similar to swing trading, position trading also carries moderate risk. As a trader, you need to be aware of the risks and timeframes that the strategy needs to achieve success in position trading.
Dhanush, powered by Ashika Group is an online trading app that offers a perfect and seamless trading experience and is among the best in India. Enjoy competitively priced products, customer-centric service, data-driven methods, and thorough research analysis.
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