Position Trader

What does position trader mean?

Position traders are long-term investors. Position traders rely on fundamental analysis of the financial instrument and are holding it for long periods of months or even years. They place very few trades during the course of a year, and are the closest type of trader to a buy-and-hold investor. They may look at weekly or monthly charts to see where an asset is relative to the long term trend. The goal of a position trader is to make large profits off of long term trends in asset prices, which is the opposite of the day trader, who looks to make many small profits from very short term trends in asset prices.

Because the position trader is concerned with long term trends they will use fundamental analysis as their first decision making process. Then they use long term indicators such as the 200 day moving average to help spot the overall trend, as well as potential buying and selling points as well as stop loss levels. Position trading is best used during a bull market, when prices are generally trending higher across an asset class.