Forex position trading is an excellent choice for any and all Forex traders. This is how it works. Position trading is simply long-term trading. Essentially it is named as such because you establish a “position” in your chosen currency pair. So basically you can use the term “position trading” interchangeably with “long-term trading”. One of the nicest things about long-term Forex trading is the ability to build a large “position”. This entails using a money management strategy to increase the number of contracts in your position as the trend moves in your direction. The ability to build large positions through long-term trading has proven to be one of the most lucrative ways to trade Forex.
Forex position trading is often overlooked because many traders don’t feel that it’s sexy enough. One reason for this is that position trading does not provide many traders with enough “action” to suit their trading style. This is especially true for beginning Forex traders as they have yet to learn the many benefits of patience in Forex trading. In our society of almost incessant obsession with instant gratification, it is no surprise that most new traders want the Forex market to “show me the money” and do it as quickly as possible.
Another reason beginning traders may shy away from Forex position trading is the potential for large swings in equity that are common when holding a trade for an extended period of time. Longer-term trading strategies can have large drawdowns and large drawdowns can make anyone a bit nervous, especially undercapitalized new Forex traders.
I personally enjoy position trading in the Forex market. Although I do trade on a short-term basis as well, the lion’s share of my equity in my various accounts can be directly attributed to position trading. My last such trade was about five months long and I was fortunate for it to be an extremely profitable one. I understand that five months may be way too long term for you if you are just starting out in trading, but I can assure you that you would simply be amazed once you learn how to position trade properly and watch your account equity grow exponentially rather than linearly.
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