Positional trading is a medium- to long-term stock trading strategy where you hold stocks for weeks to months, aiming to ride the major trend. The goal is simple: stay in winning stocks as long as the trend remains intact, especially during a bull market, to maximize returns 📈.
📈 What Types of Stocks to Trade?
With positional trading, the best results often come from growth and momentum stocks. These are stocks backed by strong fundamentals and accelerating technical strength.
✅ Key Traits to Look For:
Sales Growth: >20% year-over-year (YoY)
Earnings Per Share (EPS) Growth: >50% YoY
Positive earnings estimates
High Relative Strength vs. the broader market
Stocks already showing signs of strong price momentum, sometimes having already doubled in price before a solid entry appears 🚀
🔍 What Entry Setups to Look For?
Once you’ve shortlisted strong candidates, look for technical setups that signal low-risk, high-reward entry opportunities.
🕵️♂️ Use Weekly Charts as Your Primary View:
Look for strong trading bases that are 8 weeks or longer
12-week consolidations or more are often the most powerful
🧠 Common Base Patterns for Position Trading:
Cup and Handle
Flat Base
VCP (Volatility Contraction Pattern)
These patterns help you time your entries in line with institutional accumulation and trend continuation.
🛠 Final Thoughts
Positional trading is perfect for traders who want to benefit from multi-week to multi-month moves in the strongest stocks. By combining:
Fundamental strength
Technical analysis of strong base patterns
And market timing
...you can build positions that potentially deliver big gains over time.