Friday December 18, 2009 20:15

Use Position Trading to Your Advantage

Posted by admin as Stock Trading Strategies

Position trading is one of the three primary strategies (along with day trading and swing trading) in the category of short term investing, the opposite of a true buy and hold investing strategy. The longest term of these strategies, position trading involves typically holding stocks for a few days up to around six months.

For example, you decide to focus on renewable energy investing, don’t have the interest or time to be a day or swing trader, and reject a true buy and hold strategy for personal reasons. Position trading might be your preferred option.

You still need to perform useful research by following the trends and ratios of the companies you prefer. Yet, unlike a day trader, you needn’t analyze numerous reporting results for many hours each day. Since your position is longer than 24 to 48 hours, you can do your research quickly each day to track shorter-term trends and make your buy/sell decisions easier.

Playing a good stock simulation game and learning position trading techniques from good teachers, like WallStreetSurvivor.com, will help you become comfortable with position trading. Learning the difference between bull and bear market strategies for position trading further enhances your knowledge base. With this strategy, you combine the excitement of short-term trading with some of the wisdom of buy and hold investing.

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