Welcome to episode 89 of the Stock Trading U podcast!
Once again, back in episode 3 of this podcast series, I discussed three popular trading styles, which included position trading, day trading, and swing trading.
In our last episode (#88), I briefly explained the concept of day trading.
And before that, in episode (#87), I introduced the concept of swing trading.
But in this episode, I will discuss the concept of position trading.
So what exactly is position trading?
Well, position trading is a longer-term trading approach than swing trading and day trading.
The position trader’s primary goal is to discover new longer-term trends just as they are beginning to develop. Instead of holding a position for a single day (like a day trader) or for up to a couple of weeks (like a swing trader), the position trader will often hold his position for many months, even up to a year or more in order to fully exploit the trend.
Put simply, the position trader attempts to buy just as a new major uptrend is getting started and will hold that position until he/she becomes convinced by the chart that the major uptrend is finally exhausted.
The goal of position trading is to generate large profits from a relatively small number of trades, while adhering to a set of strict money management rules.
When coaching new position traders, I usually tell them to aim for a minimum of a 20% gain on each successful position trade, though it is possible to earn much more as you improve your craft.
Position trading is often a powerful way for a new trader to get started, especially for those traders who are beginning with a smaller trading balance, and/or don’t want to spend all day staring at a computer screen.
In conclusion, I should add that position trading is my personal preferred trading style today as it accommodates my busy schedule and suits my risk tolerance.
Jerry Robinson's Position Trading Course:
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