What is Positional Trading?

In the stock market, different traders have different time horizons. Some buy and sell stocks within minutes, while others hold their positions for weeks or even months. Positional trading falls in the latter category — it’s a strategy where investors hold stocks for an extended period to capture major price movements and long-term trends.

Unlike intraday traders, who rely on quick price fluctuations, positional traders focus on the bigger picture — identifying stocks poised for sustained growth.

💡 Understanding Positional Trading

Positional trading bridges the gap between short-term trading and long-term investing. It involves holding positions for a few weeks to several months, depending on market conditions. Traders use technical analysis, fundamental analysis, or a combination of both to identify stocks with strong potential.

For instance, a trader might buy a fundamentally strong stock showing a bullish breakout on the charts and hold it for months until the stock reaches its projected target.

⚖️ Positional Trading vs. Intraday Trading

Aspect	Positional Trading	Intraday Trading
Time Horizon	Days to months	Same day
Objective	Capture medium- to long-term trends	Profit from daily price movements
Risk Level	Moderate	High
Capital Requirement	Lower margin, longer capital lock-in	Requires high capital turnover
Market Monitoring	Limited to end-of-day analysis	Requires constant monitoring
Example	Holding Infosys for 2 months to benefit from an uptrend	Buying and selling Infosys in a single day

🔍 Key Characteristics of Positional Trading

1. Longer Holding Period – Traders stay invested to benefit from sustained trends.
2. Focus on Trend Analysis – Entry and exit decisions are based on broader market direction.
3. Less Stressful – No need to track prices constantly like in day trading.
4. Use of Technical Indicators – Moving averages, RSI, MACD, and trendlines play a major role.
5. Fundamental Backing – Stocks are often chosen from sectors with positive outlooks.

🧠 Positional Trading Strategies

1. Trend Following: Identifying and riding on established trends using technical charts.
2. Breakout Trading: Buying when a stock breaks out of key resistance levels.
3. Fundamental Positioning: Holding stocks based on company earnings, valuation, or growth potential.
4. Sector Rotation: Shifting positions between outperforming sectors based on market cycles.

⚠️ Risks Involved

Even though positional trading is less volatile than intraday, it still carries risks:

• Unexpected market events can reverse trends.
• Overnight or weekend gaps may impact your open positions.
• Requires patience and disciplined stop-loss management.

🏦 Example of Positional Trading

Imagine you purchase ABC Ltd. at ₹500 after noticing a breakout. Based on analysis, you project the stock could reach ₹650 in two months. You hold your position, and the stock eventually climbs to ₹640 — yielding a 28% return over 60 days.

That’s a successful positional trade — not too short-term, not too long-term, but a sweet balance.

💼 How JM Financial Services Can Help Positional Traders

JM Financial Services provides investors and traders with comprehensive research insights, market analysis tools, and advisory support to identify long-term trading opportunities.

With a reliable trading platform, research-backed recommendations, and expert guidance, JM Financial empowers traders to build disciplined positional trading strategies aligned with their goals.

FAQs on Positional Trading

Q1. What is the ideal duration for positional trading?
A positional trade can last from a few weeks to several months, depending on how long a trend sustains.

Q2. Is positional trading risky?
Yes, like all trading forms, it carries risks. However, compared to intraday trading, positional trading is relatively less volatile and more stable.

Q3. What tools are used for positional trading?
Technical indicators such as Moving Averages, RSI, and MACD, along with fundamental analysis, help identify strong opportunities.

Q4. Can I do positional trading with a small capital?
Yes, positional trading doesn’t require large capital since positions are not leveraged as heavily as in intraday.

Q5. Which platform is best for positional trading?
A reliable, research-backed platform like JM Financial Services provides everything from charting tools to expert insights for effective positional trading.