Position Trading

Thesis

The longest-timeframe approach. Build positions based on macro trends, secular themes, or fundamental shifts — and hold through significant interim noise. Closer to investing than trading. Theses are measured in months or years, not days. The trader bets on structural change, not tactical movement.

Entry Rules

• Identify a structural macro thesis: a commodity supercycle, a sector rotation, a monetary regime change.
• Use weekly or monthly charts for timing — daily charts are noise at this horizon.
• Scale in over time rather than entering at one price. Average across the early formation of the trend.

Exit Rules

• Wide stops that respect the larger structure, often weekly chart support or resistance.
• Exit when the macro thesis breaks, not on short-term price action.
• Periodic rebalancing if running multiple correlated positions.

When It Works

• Major regime shifts (post-2008 quantitative easing, post-2020 inflation cycle).
• Multi-year commodity cycles.
• Sector leadership rotations spanning multiple years.

When It Fails

• Choppy, range-bound macro environments where no clear theme emerges.
• When the original thesis is wrong but the trader holds out of stubbornness rather than analysis.
• During unexpected liquidity events — forced selling can flush even well-conceived long-duration positions.

Common Mistakes

• Confusing position trading with “set and forget.” Theses must be actively monitored.
• Failing to scale in — going all-in at one price exposes the position to terrible timing.
• Position sizing that cannot tolerate large interim drawdowns. The whole approach assumes you’ll be underwater periodically.
• Mistaking conviction for analysis. The longer the timeframe, the more important the underlying thesis — and the more dangerous unwarranted certainty becomes.