You must have heard the phrase ‘trend is your friend’ in various forex trading circles on the internet. This basically means that if you follow the trend while FX trading then the chances of you going wrong will be extremely low and, more often than not, you will end up making profits.
On the basis of this, you will find no better way to trade in forex than with position trading. Position trading is, essentially, trend trading at its best. Herein, you identify trends, place your trade in the market, and wait for the trend to take your position into orbit. There are actually many benefits of adopting the position style of FX trading. Consider the following.
Allows A Lot Of Wriggle Room
There is a lot of margin for error when it comes to FX trading on the basis of position strategies. The reason for this is that positions are left open for a long time in the market and market movements usually absorb most errors. Furthermore, because the size of positions is usually big and the potential profits even bigger, most types of uncertainties become redundant.
Mistakes Are Less Damaging
By the same logic, mistakes made while using the position FX trading style also end up being less damaging. For instance, if you are aiming to make tens of thousands of American dollars then a few hundred would fail to matter. In fact, it is even likely that the market’s natural movement would take your mistake and make it inconsequential.
Profit Potential Is Huge
The kind of profits that you can get if you choose the position style of FX trading would be incomparable to all other forex trading methods. In fact, individual trades, if they win, have the potential to make a huge percentage difference in your account equity.
The Least Stressful Of The Lot
Position FX trading is not even time consuming because you do not place too many trades on the market nor do you have to watch them through to completion. This is the reason why position trading is not as stressful as other forms of forex trading.
Moreover, once you make peace with the long term nature of your trades in the market then you would not even worry about the volatility of the market affecting your positions too much.
Substantial Returns On Investment
While profits gained from position FX trading are generally huge, a crucial thing to note is that it is possible to make a lot of profit with a small sum of money through this style with the proper use of leverage and market analysis.
Analysing The Market Is Much Easier
You should also know that when it comes to analysing the market under the aegis of position FX trading, the process is lengthier but much easier. The charts that you will focus on to analyse the market would be based on time frames ranging from four hours to weeks. These time frames are usually not hamstrung with random market noise, which makes the analytical process much easier in position FX trading.