Position trading is holding a trade for weeks or months instead of days. The goal is to catch a large trend and stay in it. Less screen time. Fewer decisions. Bigger moves per trade when it works.
This is not buy and hold investing. Position traders still use entries, stops, and exits. They just zoom out. The chart they look at is the weekly. The trend they trade is the multi month trend.
Weekly chart is primary. Monthly chart for context. Daily chart for entry timing. Anything smaller than the daily is noise at this time horizon.
The usual hunting ground is stocks in strong uptrends on the weekly. Consistent higher highs and higher lows. Pullbacks bought. The macro environment supports the move.
No chasing. The entry waits for a pullback to a weekly support level. Could be a moving average like the 50 week. Could be a prior breakout zone. Could be a Fibonacci retracement.
The entry is the bounce off that level on the daily chart. Reversal candle or higher low confirmation. Defined risk below the support.
Wider stops. The position needs room to breathe. A daily two percent pullback on a weekly chart is a normal candle. If your stop is two percent, you will likely get knocked out before the trend resolves.
Traders who use stops on position trades often set them ten to fifteen percent away. Below the weekly support that gave the entry. Position sized so the stop loss is no more than one percent of the account.
Trail the weekly trend. As long as the weekly chart prints higher highs and higher lows, the position stays on. The first time it makes a lower high and breaks the prior low, the trade is over.
No specific price target. The target is the trend itself. As long as the trend is intact, the position runs.
Wider stops mean smaller share counts. A ten percent stop on a $50,000 account with one percent risk means $500 risk per trade, $5,000 worth of stock. That is twenty five shares of a $200 stock.
Small share count, big move per share. That is the math. Catching a $200 stock running to $280 means twenty five shares times $80 equals $2,000 on a $500 risk. Four to one reward to risk on a single trade.
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