Position trading involves trading and holding positions in the market over a sustained period of time. The analysis involved tends to be based much more on fundamental analysis rather than technical analysis. This is theoretically one of the easiest styles to trade with, but in reality it is a very advanced method that should only really be used by experienced professional traders.
The benefit of position trading is that the analysis is potentially much easier as it is more concerned with keeping tabs on just a few core economic indicators in one or two countries. therefore as long as this balance remains the potential for the trade to succeed should remain high despite any technical chart patterns or set ups that appear in the short term.
The reason that this style of trading is best suited to experienced traders is that it requires very large amounts of trading capital, and a great deal of patience. Positions can swing against you by many pips before reaching your profit target. Many new traders would simply struggle to hold throughout these draw down periods.
In summary, Position trading can be an effective way of trading the Forex markets but only if it is carefully planned and executed based on solid trading techniques, so not recommended for new and inexperienced traders.
