Best Position Trading Indicators – List of Top 5 Position Trading Strategies in IndiaLast Updated Date: Nov 16, 2022
Indicators and tools, such as that of Position Trading Indicators, come handy, in you wish to invest the right way, and earn assured returns.
Trading financial assets can be fun and tricky at the same time. So, it is not a surprise that everybody adopts a style what they prefer the right one.
Meanwhile, there are four different trading styles, which are namely Day Trading, Scalping, Swing Trading, and Position Trading.
Now, as mentioned before, we will discuss the Indicators related to Position Trading. But before that, we will also talk a bit more about what basically Position Trading is.
So, let us start the conversation.
Best Position Trading Indicators in India – List of Top 10 Position Trading Strategies
It is safe to say that you need to do a lot of research to become a successful Position Trader.
You got to have a full-proof plan, or sometimes, multiple Indicators to get the desired return at the expected time.
So, today, we will discuss Best Position Trading Indicators that you should consider using:
- Support & Resistance
- Breakout Trading
- 50-days and 200-days EMA Crossover
- Pullback and Retracement Trading
- Range Trading
Lets dip deep about these Top Position Trading Strategies below.
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Support and Resistance – Best Position Trading Indicator
The first in our Strategies list is Support and Resistance. Primarily, it is there to figure out the asset’s price movement.
So, it can assist you to determine the precise opening or closing of an asset’s position.
Now, in case you are wondering, Support and Resistance are two indicators where the first suggests the lower limit of price, while the latter aggregates the upper level.
Now we will discuss a few points by which we can identify the Support and Resistance:
- One of the first options that every trader should opt is to check out the Historical data. You can quickly find out the Support and Resistance levels of any particular asset. It indicates the overall performance of the asset over a period, which you can use to predict the future price movement.
- If and when a breakout happens, you can expect the Support and Resistance levels to change. Now, based on that change, a trader can figure out the price movement of a particular asset.
- Of course, there is a dedicated method to figure out the Support and Resistance level using Fibonacci Retracement
Breakout Trading – Top Position Trading Strategy
Utilizing the Trading Breakouts can be an excellent Strategies if you are a Position Trader. Before that, we should have a brief idea of what Breakout is.
In simple terms, it is a phenomenon where the asset’s price overlaps the Support and Resistance levels.
The most significant reason for this incident is probably because of the increased trading volume. Now, there can be two outcomes of Trading Breakouts that you should understand:
- It can open in a long position while the security overshadows the Resistance level.
- It can open in a short position while the security goes down below the Support levels.
If in case you are expecting a large-scale price movement in security, then opting for the Breakout Strategies makes perfect sense.
However, you have got to be efficient in detecting periods of Support and Resistance.
50-days and 200-days EMA Crossover – Top Position Trading Indicators
If you are trying to figure out the Moving Averages (MA) quicker with efficiency, we suggest two EMAs – 50-days and 200-days.
It is ideal for the Position Traders to locate any trading opportunities, should it arise.
Now, we are considering the point where the MA lines overlap one another, and we come up with some possible outcomes stated below:
- Using the 50-days and 200-days EMAs, you can quickly figure out whether the market is bullish or not. For that, you need to observe if it is the golden cross, which is basically the intersection point of the slow MA with the fast MA.
- Now, using that same graph you can know whether or not the market is bearish. Just check whether the 50-days MA intersects the 200-days MA from above or not. If it does, it is called the death cross, which indicates a bearish market.
One of the significant drawbacks of these two EMAs is they both tend to lag. As a result, you will more often than not, get a backdated trend reversal report.
Therefore, the traders felt the urge to add another tool, the Stochastic RSI, which works alongside the MA lines to get the desired result accurately.
With the help of the stochastic formula, the traders can combine the 50-days MA and 200-days MA with the Stochastic RSI, to resolve the lagging issue.
So, when the Stochastic RSI crosses over 20-level, the market is most probably bullish.
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Pullback and Retracement Trading – Best Position Trading Strategy
Now here is a Strategies that can work simultaneously. When the market has an upward movement, sometimes a few short moments do occur, which reconcile the market conditions.
Such moments are widely known as Pullbacks. Now, you can use Pullbacks for planning an entry point.
The concept here is to buy financial assets at a low price and sell them at a higher price. So, you can make a perfect entry when Pullback happens and the price drops.
Now, if you are wondering what the role of Retracement here is; it is required if and when a Trend Reversal takes place during a Pullback.
To track that, we suggest using the familiar tool Fibonacci Retracement. Fibonacci Retracement helps you to figure out the precise open and close positions.
You can use a simple illustration where you draw the Fibonacci Retracement lines with 61.8%, 38.2%, and 23.6% on the price chart.
Then, you can detect trading opportunities by figuring out the support and resistance lines, and apply directly in here.
Range Trading – Best Position Trading Indicators in India
The last Position Trading Strategies that we will discuss today is Range Trading. Sometimes in the market, you can’t find any particular trend for a specific fluctuation.
Meaning, the price is moving periodical highs and lows without following any particular market trend. That, we believe, is an ideal time to implement the Range Trading Strategies.
The concept here is to figure out the oversold financial assets and purchase them. At the same time, you can sell the overbought assets using this incredible Strategies.
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Know about Position Trading
Position Trading, first and foremost, is a trading style. It is a pattern that a certain percentage of traders follow while they are trading financial assets.
The concept is to spend for a long-term; a minimum of 3 years. However, it can be 10 years or 15 years. Here, the daily market fluctuations don’t really matter.
Unlike the other 3 forms of trading, Position Trading is the only one that focuses on long-term investments.
Hence, the benefits of such trades have extra features on top of the profit that one can make.
Some also plan their retirement knowing they will potentially get a lumpsum amount at the time of their retirement.
Overall, Position Trading is what you can truly call a proper investment.
Position Trading Indicators – Conclusion
What you must understand is we have accumulated all these trading Indicators for those traders who don’t have loads of experience.
Of course, any experienced Position Trader would already have an idea of everything that we have mentioned in this article. However, it can still be a nice revision.
The pros of this trading style take two main things into account – Fundamental analysis, which is to study the company information, and Technical analysis, which is to get all the performance stats of the asset you are interested.
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