The Understanding Of Cryptocurrency Position Trading Part 2

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Good day fam,

It is your humble friend again @mato445 and I hope everyone is doing fine.

I am happy to be here in this great community to make post and interact with members of this community.

Today friends, we will be learning about the advantages of position trading in the cryptospace, and I will be hitting the nail straight on the head.

Advantages Of Position Trading

Position trading which is a long term trading strategy offers multiple advantages to investors that seek to make profit from market trend and a more relaxed trading approach.

This approach as explained in our previous post involves holding trading positions for a very long period of time.

Explained below are some key advantages of position trading.

• Reduce Time Commitment:

One major advantage of position trading is that it reduces the time commitment needed in comparison to other trading strategies.

When compared to day trading, day traders need to frequently monitor their charts throughout the day Inorder to make quick trading decisions and also execute numerous trade.

Whereas, position traders can analyze the market at their leisure which allows them to balance their other activities, and also gives less stress in association with constant market monitoring.

• Allows Investors To Benefit From Long Term Market Trend:

Another advantage of position trading is that it gives investors the opportunity to make profit from the long term trend of the market.

By holding market positions for longer periods, position traders tends to ride the downward and upward movement of the market.

This market approach plays a huge role in minimizing the impact of short term market noise and flunctuation, thus providing a more detailed view of the market direction.

• Lower Transaction Cost:

Another advantage of position trading is that it reduces transaction cost for it's traders.

Trading frequently often leads to a higher brokerage fee, and if not controlled, could eat into the profit of a trader.

The position trader on the other hand, executes very little amount of trades and this results in little transaction costs.

This cost minimization is particularly advantageous for long term traders who aim to maximize their profit in the long run.

• Flexibility To Capital:

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One advantage of position trading is it's flexibility to capitalize on fundamental analysis.

Investors can then pay attention to the underlying factors that can significantly influence the value of an asset such as market trends, earnings and economic indicators.

With this approach, there is a more thorough analysis of the market allowing traders to make a more effective trading decision that is based on the understanding of a more comprehensive factor that affects market price.

• Avoid Emotional Reaction:

With the use of position trading, traders can easily avoid emotional reaction to short term market flunctuation.

Other traders such as swing traders and intraday traders may succumb to the pressure of rapid price flunctuation, which may lead to impulsive trading decision.

Position traders have the luxury to make trading decisions on a broader market scale rather than being influenced by short term market flunctuation, which prevents them emotionally driven trade.

Conclusion

Position trading is Indeed a very good trading strategy that reduces time commitment and also reduces transaction cost for it's traders.

Position traders are not affected by short term market flunctuation but rather they base their strategy on a broader time frame.