In the previous article, we understood “Swing Trading.” If you’re someone who doesn’t want to watch the market every day but still wants to build wealth through trading, Positional Trading might be your perfect fit.
Positional Trading is like planting a tree and waiting for it to grow — you hold your trades for weeks or even months, based on strong technical or fundamental reasons.
What is Positional Trading?
Positional Trading is a long-term trading style where traders hold positions for several days to months to capture significant price moves.
How Positional Trading Works
Traders use technical indicators, price patterns, or even fundamental analysis (like company earnings or sector performance) to identify high-potential opportunities. The goal is to ride the full trend — from the start to the end.
Key Features of Positional Trading
| Feature | Description |
|---|---|
| ⏳ Holding Period | Weeks to months |
| 🔍 Analysis Type | Technical + Fundamental |
| 🧘♂️ Screen Time Needed | Very low (Can be checked weekly or even monthly) |
| 💰 Capital Requirement | Moderate to High (but works well even with small capital) |
| 💼 Best For | Working professionals, part-time traders, and investors |
| 📉 Risk Level | Moderate – uses stop-loss but exposed to overnight/weekly risks |
Advantages :
- Low Stress: You don’t need to sit in front of screens all day.
- Time-Saving: Ideal for people with a job or business.
- Bigger Moves: Captures full trends — from breakout to climax.
- Fundamental Friendly: Works well with earnings, news, and long-term trends.
Risks of Positional Trading
- Overnight Risk: Sudden news can gap the price up or down.
- Slow Feedback: You may have to wait weeks to know if you’re right.
- Trend Reversal Risk: If trend changes suddenly, you might lose gains.
Tools Used
| Type | Example Tools |
|---|---|
| 📊 Technical Tools | Moving Averages, RSI, MACD, Trendlines |
| 🏢 Fundamental Tools | Earnings Reports, P/E Ratio, Sector Trends |
| ⏰ Timeframe Charts | Daily, Weekly |
Example of a Positional Trade
📌 Example:
Suppose Infosys (INFY) breaks out from a long-term resistance at ₹1,500 with strong volume and good earnings report.
- Entry: ₹1,520 after breakout confirmation
- Target: ₹1,800 over 2-3 months
- Stop-loss: ₹1,450
- Reason: Breakout + strong Q4 earnings + bullish sector (IT)
This is a classic positional setup where you hold until the price reaches your target or the trend reverses.
When Should You Choose Positional Trading?
Choose if:
- You can’t track the market daily.
- You prefer fundamental + technical mix.
- You’re patient and can hold trades without panic.
- You want to reduce noise and avoid intraday stress.
Summary: Positional Trading at a Glance
- Long-term trend following.
- Based on strong technical or fundamental reasons.
- Ideal for busy individuals with long-term goals.
- Less screen time, more patience, and disciplined planning.
If you’re starting, begin with small capital, learn with demo trading, and understand both the technical and emotional side of trading.
Start Your Trading Journey