Positional Trading
Holding a position for weeks to months, aiming to capture a sustained trend rather than a single swing.
How it is identified
Test: holding period measured in weeks or months, with the exit governed by trend condition rather than by an intraday level
Unit
qualitative
In depth
Positional trading tolerates far larger interim drawdowns than swing trading, because the point is to stay in a trend through its corrections rather than to trade each one. That requires wider stops and correspondingly smaller position sizes, an adjustment many traders skip and then get stopped out by ordinary noise. Costs per unit of holding period are low, and the overnight and weekend exposure is total. It differs from investing in that the exit rule is technical rather than valuation-based, so a positional trader will sell a cheap stock in a downtrend without contradiction.
Worked example
A positional trader risks 1% of a ₹10,00,000 account, or ₹10,000, per trade. With a wide ₹25 stop on a ₹500 stock, the position size is 10,000 / 25 = 400 shares, worth ₹2,00,000. The wider stop forces the smaller position, which is the point.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Positional Trading” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.