Trading positions is the longer term style, requiring a good understanding of the fundamentals, an outstanding intuition and a good view of how the price will fluctuate in the long run. It is a trading style for traders with steel nerves and angelic patience, those who do not mind waiting for long periods of time for their well-deserved profits.
The primary objective of position traders is to benefit from the dominant trends rather than the short-term market fluctuations.
Normally, position traders are extremely smart and very wealthy. To withstand substantial depressions and price swings, every position trader must have a sizeable account.
Position traders are independent thinkers. They are convinced of their views and tend to ignore random market fluctuations that may scare down less confident players.
Example of a Merchant
Warren Buffet is the first that comes to mind when we think about the most prosperous market participants who run long term business. He is a legend and one of the richest men in the world. He is widely known as the most successful investor and a trader in FX market position since 2002. At that time, Buffet sold the US dollar under the argument that it would fall due to America’s trade deficit. The following years were very successful for him, but in 2005 the US currency rose and Buffet decided to leave its short USD position. As a result, he earned $ 2 billion from this business. If it were not for the USD advance in 2005, its profits would be $ 1 billion higher.