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‘Learning never makes you lose.’ If you are aware of this proverb then you must know that the more you learn in the trading industry, the more experience you gain. There are several aspects of the trading industry that remain veiled to traders. Those traders might be having a good time with their trades or might not feel that they need to know more. However, the investment industry is always changing, so you can never say that your trading style has a one hundred percent chance of winning.
Experimentation is an important aspect of this market. You need to look for new trends and popular events to have a better grip on the market. Again, many didn’t find the right platform yet. They may have started with some particular strategies, but in the middle, they may need to look at the wider field to search for better opportunities.
One of the most popular trading strategies is position trading which enables the investors to hold their positions for a long time. Though it is not much profit in the currency market, it has a vast field of opportunities for those dealing in a less volatile market. Especially, stock traders are the most benefited by using position trading. In trading, instead of reacting on reflexes, investors mainly focus on the technical analysis and observation for a long time to find the best point at which to execute a trade.
Here are some of the best things about position trading that you should know before you look for other information.
Less stressful work
No one can deny that the trading industry is one of the most stressful jobs in the finance sector. When it comes to money, everyone feels a bit protective of their capital. That’s what makes all trading work so stressful. You can only speculate about the price changes. But speculation doesn’t guarantee a price change. That’s why traders cannot fully trust their speculation as well. Another important factor is to analyse technical information. When you are looking at the charts you will find it very difficult to cope with these price changes.
So, all these events make trading work extremely stressful for most participants. But the market sentiment is very important as it can profoundly affect your trading results. So, when you think about it, you will see that position trading minimizes such problems by many times as one doesn’t constantly need to look at the charts or even by swayed by the market fluctuations. That means, less stress and a more trade-friendly environment for you if you take up position trading!
Less expenditure
In short-term trading, traders look for the trade signals in the lower time frame. That means they get more opportunities to trade. But along with more opportunities comes more expenditure. Those who are experienced in trading bonds, know how varying your trade holding period can change the cost of trading. In the Forex market, traders usually pay a fixed fee or commission to the brokers per trade for the facilities they provide. This means, an investor will have to pay for every trade he takes on. Now, the harsh reality is that the traders can’t make a profit in every trade. So it is better to minimize the expenditure in every possible way.
When you are taking trades, the brokers deduct some amount from their investment regardless of the outcome of the trade. As a result, if you trade more frequently, you have pay more fees. On the other hand, position traders don’t deal with trades that frequently and they only join a deal when the condition is favorable. That way, their chances of losing decrease a lot. And you don’t have to spend unnecessary amounts of money either.
Now, though we have only stated the advantages of position trading. It also has some disadvantages. However, the negative aspects of position trading are fewer than is the case for any other form of trading.