Definition
Position trading is an approach in which a trader maintains exposure for weeks, months or another extended period rather than focusing on intraday fluctuations. The intended horizon depends on the strategy. A position trader can take either a long or a short view; the word position does not mean that the trader must buy and hold.
How It Works
The trader forms a thesis from fundamental information, broader price structure or both, then defines entry, sizing and exit conditions. Temporary fluctuations may be tolerated while the thesis remains valid. Derivatives-based exposure can require ongoing margin management, funding payments or contract rolls throughout the holding period.
Key Considerations
Fewer trades do not automatically mean lower risk. Large adverse moves, changing fundamentals and concentration can undermine a long-horizon thesis. Financing costs can accumulate, and leveraged positions may be liquidated before a forecast has time to develop. Position trading is a description of approach and time horizon, not a guarantee that waiting longer will turn a losing trade into a profitable one.