One of the reasons I like Position Trading

What kind opf trader are you?

  • I am a position trader

    Votes: 132 27.7%

  • I am a swing trader(overnight)

    Votes: 137 28.8%

  • I am a day trader

    Votes: 207 43.5%
  • Total voters
    476
The day trader has more opportunities, but the vast majority of daytraders, especially newbies, will miss the vast majority of these.
 
I believe that the bulk of daytraders become addicted to what they are doing, just as a gambler would. Even though the activity is self destructive, they continue to do it.
 
Position trading can be just as bad. Losses are bigger, and its even more frustrating when your holding for a month, and your trade turns out to be a loser or a break-even.

cm69
 
I think applying swing trading methods for intraday time frames doesn't work very well, it's difficult to do both simultaneously in any case.
 
If there were to be a logical way of teaching trading, say it were to be taught at schools, how would they teach it logically?

Would they start with day trading, position or swing?

Which trend do you need to be able to spot first?

Or does it not matter?
 
Quote from Cutten:

The majority of hedge funds underperform the S&P. Given this fact, I find it hard to believe that there is this army of retail traders doing really well at "position trading". Are we expected to believe that Joe Schmoe has any real insight into the markets such that he can take money at will from major trends in oil, gold, stocks etc? This thread makes it sound like all you have to do is bring up a long term chart, stick a moving average on it and then you coin money.

Sorry but it doesn't work that way. Position trading is damn hard, and IMO edges are tougher to exploit than short-term trading, because the frequency is far less. It takes many years just to see 1 or 2 market cycles and build up the experience necessary to identify long-term trends and (more importantly) hold on for their full duration, whilst avoiding getting faked out or cleaned out during the significant corrections that occur.

I've posted several times on long-term trends that subsequently played out, in assets like Brazilian stocks, the Nikkei, gold, silver, oil, copper etc. Having the view is one thing, but trading it on size and holding on during a hefty correction (or trying to exit then get back in before a move to new highs) is a whole different ball game. And at the time, many people had opposing views to mine i.e. were on totally the wrong side of the market. If you can have the correct view with strong conviction, and find it tough to take out more than say 30% of the move on genuine size, what chance to the vast majority who were picking tops in oil all the way up, or going long gold just before the recent selloff?

I would be surprised if more than 2 or 3 people on thoe whole of this site have been long oil for the last $40, or long gold since $350, long Japan from 10,000 etc. This idea that position trading is easy is just folly.
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Very well said indeed.
 
"I would be surprised if more than 2 or 3 people on thoe whole of this site have been long oil for the last $40, or long gold since $350, long Japan from 10,000 etc. This idea that position trading is easy is just folly. "

i, for one, was long gold as of 1999

i had no idea what daytrading was. i simply saw everybody yammering about the stock market, and gold totally suited my contrarian investment style

i plunked down a lot (for me at the time) of money and put it in MIDSX. i then dollar cost averaged additional money into it for the next two years

i cashed out 2/3 before gold peaked, but after almost a quadruple, i took some damn profit

my point is that you do not have to be a genius, but it often pays to be a contrarian, especially if you have some patience and are willing to invest in something that NOBODY else likes

that's not really trend following. that's getting in early and then letting a trend develop.

ANY investor could have done this. i doubt many did, because everybody was caught up in the nasdaq fever

if this sounds boastful, fine... i've made many mistakes, too.

:)
 
There is another item which I like about Position Trading. Stops are not run the way they are during the day. Stops are run during the day because professionals know that stops are placed very close or just beyond "perceived" support and resistance levels. I know this to be true because I have been experimenting with a breakdown/breakout strategy during the day in ES and FX Futures and the whipsaws are numerous. This strategy was profitable since I increased each time (no Martingale), but that system works much better on daily,weekly and monthly charts.:)
 
The same principles that apply to the micro apply to the macro.

A good position trade starts with the micro, you have more time for the market to 'confirm' it's true direction with position trading.

I get the idea here that most people who have had thier fingers burnt position trading have deserved it.

Position trading can lead you into a false sense of security, it can give a trader the impression that they can just 'enter' bloody anywhere.

This is far from the truth.
 
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