Position Trading

I don’t prefer position trading as one needs to have huge capital and gets trapped for years. And as large capital is involved and there are few trades, risk per trade increases.

 

This means nothing

 

Why is that? There is no reason to be trapped after all it's called position trading which means you can trade positions.
Why would you increase your risk per trade? You should plan on risking a certain percent of your capital.

 

For longer term investing you don't use a stop loss. Everyone says we have to always use a stop loss but I don't believe that is necessarily true. You can spots signs of a bottom and then accumulate at those bottom prices which is a form of managing risk.

My trading style is also swing and investing longer term because that is where the real money is made. The few homeruns that will make you a fortune to retire early. Daytrading is very difficult imo, and you can't scale as well as longer term swing. If you want to make a consistent say $5-$15k a month from trading then do daytrade. If you want to hit a few homeruns and earn millions than do longer term trading/investing.

 

Do you have any method of controlling your risk?

 

Surely even position traders have an "Uncle" point where they finally throw in the towel on a bad trade/investment?

 

In 2007 I'm sure a lot of position traders thought JC Penneys was the Cat's Meow buying it at $86/shr, prefering it over Walmart,Target,Dillards,Kohls,et. I guess they still loved it at $45/shr in 2012. Todays it's trading at .14/shr. Basically down 100%. Are those position traders still holding JCP waiting for it to come back to $86/shr ?

 

Monthly DCAing in a bear market so you get in a low buy in average price. I have been DCAing bitcoin 2018 onwards when it was below $10k and at one point prices were as low as $3kish.

Cryptos have bull/bear markets of 4/5 years and when they fall the big coins fall 80% while altcoins 90+%.
You want to wait Bitcoin/Ethereum to fall more than 60% or more from a peak high before you start accumulating monthly this is a form or risk control, since it is unlikelier for it to fall another 60%.

As for Alts waiting them to fall 75% or more would be better but then it gets into dangerous territory as few alts will do well in the long run so proper research is needed as well.

 

Unless your system is designed to have months of drawdown this seems dumb.

 

I don't agree it's riskier. There are few trades but they are much much larger winners. Also price patterns respect longer time frames more. Shorter time frames can be subjected to manipulation and is pretty random.