Are you in a full-time job? Are you unable to spare time for forex trading? Then no need to worry, because foreign exchange market has something to offer to people like you who have regular job and still they want to do forex trading to supplement their income. Will you be able to trade forex? It would be impossible for you to spare more than 30 minutes each day in forex trading. But let me inform you that now you can trade with forex position trading style.
In forex trading, there are mainly three forms of trading, and they are day trading, swing trading and last but not the least is forex position trading. With the help of position trading, any trader can open a trade and keep that open for almost weeks and even for months also.
What is position trading in forex?
Position trading is better understood as longest term trading in which traders can last for a long time. Basically, this type of trading practice is mainly reserved for ultra-patient traders, and it also requires a good understanding of the basics of forex trading. Moreover, it is also said that traders with forex position trade must have thick skin because it is quite sure that traders can go against himself at any point of time or another.
Let us consider a decent example that will help you to understand forex position trading in detail.
Suppose a trader purchased 1 mini-lot of EUR/USD at 1.3100 and set stop loss at 1.2980. It poses a risk of $20. Now, when price rises the trader might buy a 2nd mini-lot at 1.3120 and then again he set stop loss at 1.3100 with raising the stop of the first lot to 1.3100. So, after all these, the trader has two lots with overall risk of $20.
Now again trader see that the price is increasing, and trader purchased 3rd lot at 1.3140 and placed stop loss at 1.3120 with the rising the stop of the first two lots to 1.3120. This makes sure that even during the worst scenario the whole trade is at break even. Then again with no rise in the price, the trader purchased the 4th lot at 1.3160 and set the stop loss at 1.3140.
So, as per the above scenario, the trader has raised the stop on the first three lots at 1.3140 that will surely safeguard his profit. Finally, the trader purchased the 5th lot and set the stop loss as before and makes sure profit of $100. You can see that throughout the process the risk of this trader remained at $20 only. So, in forex position trading the traders can gain huge profit along with they can also limit their risk exposure.
What things you should have to be a forex position trader?
You must have an excellent understanding of the fundamentals.
You must not have any problem in waiting for grand achievement (good profit).
You should be an independent thinker.
Last but not the least you must be extremely calm and patient.
“I am no better than the next trader just quicker at realizing my losses and moving on to the next trade.” - George Soros