Position trading is a trading strategy where an individual holds a position for a long period of time—generally several months to years long. A position trader is trying to follow long, over-arching trends while ignore short term price volatility.

To a position trader, a large drop in an asset's value in the short-term doesn't matter if it continues to increase over a longer time span.

An example of a position trade is buying Bitcoin back in 2015 when it was $250 and first started showing signs of starting an upward trend, and the holding until the upward trend reversed, which was 2008 when it dropped from its high of $20,000.

The advantages of position trading:

• The gains can be enormous. You can ride a huge upward trend over a long period of time. For example, when Bitcoin rose from $200 to $20,000 in 2,5 years.
• It can be a lot less time consuming and stressful. You only need to check in on your trades every so often. And short-term reversals and retracements are not a cause for immediate concern.
• You can reduce costs on trading fees. For exchanges that charge a flat fee per trade, such as in the stock markets it can cost about $10 per trade, you can save a lot of money by only doing a few trades per year, rather than a few per day. The crypto market charges a percentage of the trade value. For frequent trades on both the short and the long, the fees can rack up higher than for one long-term trade.

Disadvantages of position trading include:

• It takes a while to realize a long-term trend has reversed, meaning you could lose a lot of money before.
• Your gains can be lower than frequent trading because you're not taking advantage of short term volatility. For example, with day or swing trading, you can take advantage of each intermediary step in a short-term trend where the price moves 20% in one direction, then retraces, then goes back up. With a position trade you'd only get the gains from the entry price and the closing price, and ignore all volatility in between.