What is Position Trading in Forex?
Quick Answer: Position trading is a long-term forex approach that holds trades for months or years based on macroeconomic trends and central bank policy. Traders target multi-hundred-pip moves with low trade frequency and wider stops.
What is Position Trading?
Position trading is a long-term trading style where positions are held for months or even years, based on fundamental economic analysis and macroeconomic trends. Position traders focus on major shifts in central bank policy and economic cycles, ignoring short-term volatility.
Key Characteristics
- Holding period: 3 months to 5+ years
- Profit targets: 500-5000+ pips per trade
- Time commitment: Weekly or monthly position checks
- Trade frequency: 1-6 trades per year
- Analysis focus: GDP, interest rates, policy shifts
Practical Example
You short EUR/USD at 1.2200 in 2021, anticipating aggressive Fed rate hikes while ECB remains dovish. Over 18 months, the pair falls to 0.9600 for +2600 pips profit as your macroeconomic thesis plays out.
Related Terms
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