Trading, like any other type of work, has its own special rules and meanings. As you delve deeper into your chosen industry, you need to understand all the meanings that pertain to it. SDG Trade is ready to help traders understand these difficult questions. This article will raise the topic of trading by holders of long and short positions.
In order to better understand this topic, we will analyze it with examples.
Long positions
So, closer to the topic. The term " long position" is translated from English as a long position (long). This position is opened to acquire income from the upward movement of the market. The essence of opening a position is to be able to:
- Buy shares at a cheap price;
- Get a rise in value per share;
- Sell your shares at a higher price.
The trader purchased Google shares, with the hope that their price will rise over time. For the implementation of its trading operation, a trader, purchased 20 shares of the corporation at $30 and, having waited for the price to rise to $45, sold the acquired 20 shares. Income of the position holder in this case is created from the difference in volume between the purchase price (cheap shares) and the sale price ( expensive shares). As a result, the trader, being in a long position, received a profit from the transaction in the amount of $300.
Long position holders are some kind of bulls, they are also called “bulls”. Why bulls? The answer is simple: the behavior is exactly the same as bulls during a bullfight.
Short position
Now it's time to talk about the short position. What it is? And how to use it? More on this later.
The term " short position" is translated from English as a short position (short). It is opened to receive income from the downward movement of the market, that is, its fall. The purpose of opening a position is to enable:
- Sell shares on the market at a high price, having previously “borrowed” shares from a broker in kind;
- Wait for the price to drop
- Buy shares at low cost.
The next step is to return the shares to the broker, which were borrowed and brought income.
A trader "borrowed" 20 shares of Facebook Corporation from a broker, in the hope that they the price will fall. After that, the trader on the same day immediately sells these shares for $30 on the stock exchange and, having waited for the price to fall to $15, acquires the sold 20 shares. Next, the trader gives back to the broker all 20 shares borrowed. The income of the trader in this case also depends on the difference that he received from the transaction. As a result, the trader, being in a short position, gained profit from the deal - $300.
Such traders are short sellers or the so-called "bears". Why? The answer is obvious: The behavior is very similar to the mannerisms of a predator.
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In this article, we will try to deal with the opinion that the metatrader is a scam and this trading platform designed for divorce.
From this article you will learn:
- Manipulation of quotes in metatrader.
- Requotes in metatrader.
- Ping to the server in metatrader.
Introduction.
In the VKontakte group, I published a certain post with hotkeys that are available in Meta Trader 4. Many people have been bombarded because of the metatrader, supposedly this is a scam platform and a terminal for fraudulent tricks. Today I will tell you about Meta Trader4 and why it was considered a scam, and what is true and what is fiction. Let's skip the points that there are certain plugins that you download or install for you broker. There are brokerage companies that are scammers, hiding behind legitimate forex, but broker ratings play a big role and if the company is normal, then nothing like this happens.
Quote manipulation.
In general, the whole claim against the metatrader arises because the broker allegedly can manage quotes, and the following is given as arguments: here you see schedule, This is the currency pair CAD\CHF
, and with the help of simple manipulations, a huge hairpin appears on the chart
and then screams begin that the broker can control your quotes, that he deliberately knocks out your stops.
However, this quote editing function was originally built into Meta Trader in order to remove these same hairpins. If you look at the same CAD\CHF pair and in order to remove this gap, you had to dig into the quotes, now these quotes have already been removed automatically. Also, I cannot view the entire chart in full, because this very candle prevents me from doing this. If we take a regular ATAS terminal, then when I expand the chart, I can expand it any way I like.
and at the same time, I do not see this hairpin, that is, regardless of the size of the candles, I can turn this chart in the way that suits me. And here you do not need to implement this function, which would allow you to remove the quote for a more adequate display of prices, and I cannot do this in the metatrader. If you think that the broker is deliberately draining your positions, arranging such hairpins, then this is simply stupid, this one is simply very pale. If you have an account of several thousand dollars, then the first thing you do is screen all this and immediately run to the forum with the words: “I have a hairpin, in no case do not invest in Alfa Forex or Alpari.”
But in this case, most often such transactions are canceled, usually with a profit, because the essence of a broker is to take our money and it doesn’t matter which broker it is - Russian, not Russian, all brokers are interested in making a profit, and they all work against us, against traders. And of course, the broker is not interested in spoiling his reputation because of your $100-200 in your trading account. But this is in relation large companies, if the company is small and if the company has a lack of liquidity, then it will drain you, but this is done in completely different ways, this is done with the help of requotes and slippages.
Requotes.
That is, this is when the broker starts writing to you in the terminal: “Prices have changed, do you want to enter?” Of course you want to come! Or maybe you changed your mind in these couple of seconds to go in, maybe the price doesn’t suit you anymore. But this is most often determined by banality - not by the fact that the broker deliberately drains you, but by your poor Internet connection with the server of this exchange. This is all very simple to solve - by clicking the "Rescan servers" button in the lower right corner
and in this case, the server for which you have the optimal ping and connection will be selected, and you will not have any requotes. Is that why everyone says that Instaforex is a terrible broker, including me? Yes, because they have constant requotes, and if you score “Requotes” in the YouTube search, you will find such shocking videos where the guys fill orders for 20 minutes, by the hour.
Trader - Broker - Exchange?
But it happens that you have a normal Internet connection and requotes still appear, here you can talk about the greedy nature of the broker you trade with. We always remember that there is the following picture
From left to right - you, your company and the exchange, and there is an exchange between them. And accordingly, if your broker is a dolt, then it is at the stage of interaction with him that you have problems (requotes, slippage). And do not forget that any forex (mostly offshore) closes the chain, that is, transactions are not displayed anywhere. And if you think that there is no such thing on the Russian exchange, then you are deeply mistaken, because there is always this scheme - a trader - a broker - an exchange. And if the broker has a server from the times of pre-revolutionary Russia, then you will have slippage.
What is slippage? This does not occur in Forex, but this is what happens on the Russian stock exchange:
you open a position, you will always be executed, there have never been any requotes on a real exchange and there never was, if you got up for sale in position 1, then you will be executed in position 2, this is called slippage. Moreover - on a real exchange there is a concept of buyers and sellers - you pressed the sell button, and the nearest buyer is lower, for example, in position 2, and you were executed much lower, which is not the case in Forex.
And now let's imagine that your brokerage company turned out to be a rabble of scoundrels and wants to put a spoke in your wheels in order to merge. Let's say you started a grand conflict with a manager and showed him your place. In response, they will simply switch you to another server with a huge ping, which they can do elementarily, and as a result, you have huge slippage - you are executed by the devil knows where, when you had to exit the market at all. Therefore, in this case, we are not talking about a platform, but about a normal, adequate broker. Once again, the largest broker in your country is often the most reliable.
I welcome if you can trade in normal, adequate software, if you are able to buy high-quality software - Volfix, ATAS. But unfortunately, many of my listeners do not even have money to replenish the deposit, not to mention giving $ 74 a month, but sooner or later you will have to do this. Do you think the toad didn't choke me when I gave $2000 for the terminal? But I understand perfectly well that these are my expenses - I do business on the stock exchange, the same thing that absolutely all traders do, they earn money here. Trading is a business, there is no trading, there is no business without certain investments. There are both pluses from your trading, and minuses - this is a certain trading security, taxes and a bunch of operating expenses. And, unfortunately, it is impossible without minuses. Therefore, invest in software! You will have to do it sooner or later, if not today then tomorrow.
If you have an adequate broker, trade, analyze in Meta Trader 4, although doing chart analysis here is still hemorrhoids. And do not be afraid of ANYTHING, and no one will put a spoke in your wheels, even with your $ 500 - it does not make sense. 96% of traders merge money, and if I myself am a broker, then it is enough for me to wait 2 weeks until you merge yourself and I will remain clean, out of business. Another question is that when people merge, then anyone but themselves is to blame. I very often heard this: “Artem, very often, when I enter a position, the broker makes quotes against me.” He sends me a screenshot with this currency pair, I open this currency pair in another terminal and there is exactly the same price, that is, the person thinks that the broker is playing against him, although in fact the market is playing against him. If you have money, then immediately buy normal, high-quality software. I welcome the purchase of software, books, courses, articles, various access to forums, always invest in your education and technical equipment as well. Since in trading it is one of critical factors. The metatrader has a lot of minuses, starting with the fact that I don’t have a window when I have 4 monitors, and running from different users is another hemorrhoids. Everything is done very clumsily, poorly, the same volumes
What is position trading?
Position trading is long-term trading with a trend on charts with large time scales. In position trading, fundamental analysis (its macroeconomic part) and the technical method of forecasting are often used. This style of trading is used in literally all markets.
Position traders can hold both long and short positions for the long term. In the latter case, they earn on the depreciation of the asset. Positional short positions are very interesting during periods of financial and economic turmoil. For example, this style made it possible to earn money during the crisis of 2008-2009, when many stock markets marked a significant drop in quotations.
Position trading basics
The essence of position trading is that a trader opens a position (long or short) in order to maximize profit from the main trend. For position traders, short-term price fluctuations and corrections are not important. Instead, they are interested in the main trend itself, which can last weeks or even months.
This approach to trading has its advantages.
- One of them is that a trader does not have to spend all his free time at the computer. He conducts an analysis, which can take from several hours to several days, and then makes a key decision.
- In the future, the open position is simply monitored from time to time depending on the events that occur in the market.
- Small price fluctuations are not important for a position trader. Accordingly, frequent monitoring of the market is not required.
Position trading can be contrasted when traders are constantly at the computer and open deals within one trading day. As for another style - , here traders open trades less often and hold positions from one day to several weeks. Position traders open several trades a year. Swing traders can open from 25 to 100 positions per year (sometimes more). As for day traders, they get about 1000 or more positions per year. The difference is simply enormous.
Finding Entry Points in Position Trading
The search for signals in positional trading can be carried out using various methods. For example, some traders prefer to look for assets that have good trending potential but are still trading in a range. In some cases, you can open positions on assets that are already trending. In the second case, it is much easier for position traders, since the trend has already begun. Hence, they can simply join it. Much less time and effort is spent on analysis here.
The main task of a position trader is to find a trend. Accordingly, trading within the ranges during periods of consolidation and correction is not carried out, except when trading is in very wide ranges and lasts for several years. In the case of such ranges, the price can move from one border to another for several years and this can also be attributed to a trend, which is well suited for a position trader.
Trends often start with breakouts of key levels or certain patterns, including price action. In their work, position traders can use, among other things, indicatorstechnical analysis. In this case, most often they find trends that have already formed (since most trend indicators lag behind the chart).
The analysis of stock quotes can be carried out, for example, using a 40-week moving average. In this case, the trader may find stocks that have already started to rise or fall.
You can apply several indicators at the same time to search for clearer market entry signals. Using several moving averages with different periods will more clearly indicate the beginning of a trend formation.
Basic Position Trading Strategy
Despite the fact that in positional trading transactions are held for a long time, a trader must follow certain rules in order to succeed. In particular, we are talking about planning entry points, exit from the market and risk management.
As basic strategy for long-term work with stocks, we can suggest a price crossover of the 40-week moving average (aka 200-day). Once this happens, you can enter the market.
- If the price crosses the moving average from the bottom up, a signal appears to open a long position.
- When the price crosses the moving average from top to bottom, there is a signal to open a short position.
At first glance, everything is quite simple. But after entering the market, we need to decide on the exit rules, that is, closing the position.
There are two main approaches here. You can close a position both manually and using stop orders. Let's start with the second. Here we can recommend placing stop orders at a distance of 5% from the moving average.
If the trader is not a supporter of placing stop losses, he can expect the moment when the price crosses the moving average in the opposite direction from the signal and consolidates there.
The screenshot shows the moment to enter a trade, as well as the opportunity to close the position. The exit in the picture is quite early. As you can see, a fairly strong continuation of the trend develops further after an insignificant correction.
Risks and limitations in position trading
The main risks of positional trading include the danger of a trend reversal before it reaches the point planned by the trader. The same small fluctuations can lead to the fact that the correction will lead to a complete change in trend.
Another important point associated with the limitations that are unique to positional trading. Such restrictions are connected with the fact that a trader invests money for a sufficiently long period of time. Therefore, before opening a position, it is necessary to plan your investments so that later you do not have to exit the market ahead of schedule.
But despite such risks and limitations, position trading has a lot of advantages.
Advantages of position trading 
- First of all, position trading allows you to get a complete picture of the market and find the main direction of price movement. The trader does not have to be distracted by minor fluctuations, which significantly reduces the risk of making wrong decisions.
- The advantages of positional trading include the possibility of using fundamental analysis. Trader analyzes economic situation in a particular country and in the world and makes a more informed decision. Along with this, he can use technical analysis strategies to get more accurate signals.
- Finally, position traders work in a more relaxed and measured mode. They don't need to rush into making decisions. The same applies to work after opening a deal. There is no need to constantly monitor the market. You can only open the chart from time to time and view Current state market. Fundamental traders are browsing last news and statistics and also occasionally monitor the situation on the chart. In addition, both forecasting methods can be combined in the work, which makes the received signals even more stable.
Investing or trading?
Many novice traders mistakenly believe that position trading is an investment. In fact, this is far from the case. There is a huge difference between an investor and a position trader. Enough in the next article.
- A trader, regardless of how long he concludes transactions, remains a trader. The main income comes from speculation. That is, a trader buys cheaper in order to sell more expensive.
- The investor makes a profit gradually, building up his portfolio of stocks, funds and debt securities. Investors usually reinvest most of their profits in the purchase of new assets. The investor's profit consists not only and not so much in the difference in quotations, but in dividends and other payments.
- For an investor, an income of 20-25 percent per year can be considered quite good, while a trader strives to earn the same percentage only in monthly terms.
- True, there is still a slight similarity between an investor and a position trader - they can hold the same asset for a long time. But here, too, there is a difference between them in terms of goals. The only reason why a position trader holds his position is the expectation of profit from the appreciation or depreciation of the asset. As for the investor, he can expect an increase in dividends, an increase in the value of the company, an increase interest payments and so on.
- The difference between an investor and a trader lies in the strategies. The main system of the investor is the compilation of a portfolio of assets. The trader, on the other hand, uses many different tactics to help him identify cheap stocks that have upside potential or expensive stocks that have downside potential.
Is position trading worth it?
Determining this issue is not as easy as it seems. In theory, it all sounds tempting enough - low risks, higher potential and chances of success. However, position trading is not suitable for every speculator. Also, as for example, intraday.
What should you pay attention to first of all? In order to make good money on position trading, you must have an appropriate deposit amount. On small accounts, a trader will not be able to earn a significant profit. Yes, and the rules of money management here are somewhat different. Stop loss due to work with higher timeframes is set further. Accordingly, if a trader breaks the rules and invests most of his funds in a trade, a stop order will not save him from significant losses if the situation develops against forecasts for a certain period of time. And this is quite real. After all, corrections and consolidations in long-term trading can range from 100 to 500 or even more points in particularly volatile markets.
Before turning to position trading, it is advisable to try it with a small investment in order to understand if the trader can even work in such an environment. Not everyone is able to sustain an open position for several months, let alone several years (especially if the speculator has previously worked on intraday strategies).
During testing, you can continue to work with your previous style, only from time to time referring to a long-term position to analyze the situation and possible adjustments. Thus, the trader will be able to understand for himself whether it is worth using such a method or whether it is better to turn to short-term trading, where it is possible to work with a smaller deposit and, with the appropriate approach, increase it several times over the same year of work.
If you find an error, please highlight a piece of text and click Ctrl+Enter.
This widget displays the current market sentiment. Position ratio data is collected from multiple brokers.
Analyze the open positions of traders not only at the current moment, but also in the form of a chart.
In this article, we want to briefly tell you what they are and describe the basic principles of their analysis. In addition, we present you our own developed tools (services) for a convenient analysis of the ratio of positions.
The service is an aggregator that combines data from various brokers. With it, you can analyze open positions of traders online, not only at the current moment, but also by looking at the history of this indicator for several previous months. In addition, the tool can be configured to display one or several brokers at once. If you understand what I'm talking about, you can go straight to the study.
What are open positions of Forex traders?
EUR/USD Position Ratio Example
Open interest, or open positions is a percentage value that displays the current difference between the number of traders who opened a deal to buy and sell a currency. At the same time, already closed transactions do not affect this indicator.
Positions of Forex traders is a great indicator of market sentiment that allows you to look at.
Most brokers, in pursuit of the loyalty of their clients, try to provide data on the open positions of traders. But for the end user, it is difficult and inconvenient to analyze, and even more so compare this data from a dozen different sites. Hence the idea of creating a single tool for analyzing the ratio of short and long positions of all brokers together.
How to analyze the ratio of short and long positions?
First of all, you should not rush to open deals. To get started, study the data on the chart, watch it for a while until you find some price action. In order to shorten the time of your searches, we will hint at what to look for:
- Almost an axiom of the market: " The price always goes against the majority", respectively, opening a deal "against the crowd", you get extra percentage to ensure that your transaction is successful.
- Moreover, personal experience shows: when there is a persistent trend in the market, most traders open positions against it. Accordingly, the statement will also be true that opening a position against the crowd, you open a position along the trend.
- Sometimes you can see how they “gained passengers” or “threw extra ones”, that's how it is in this case. Example.
Now let's move on to the tools.
How to use the tools
Let's clarify one point: the chart shows the percentage of long positions, but since the total value of long and short positions is 100%, you can easily calculate the value of short positions by subtracting the percentage of long positions from 100%.
How is the average calculated?
Considering that the volumes of transactions for each broker are different, it would be incorrect to calculate the average value of open positions using the simple arithmetic average method. For example, the volume of Oanda's open positions is many times greater than the volumes on myfxbook.
To take into account the difference in volumes, each broker is assigned a "weight", and the more it is, the greater its influence on the average value of open positions. The approximate "weight" of each broker is indicated in the picture on the right.
Conclusion
You should not take the information received as a guide to action, there is always a possibility that the price will go against your signals. The market is often like a tug-of-war where five people compete against ten.
It will be interesting to hear your methods of analysis open positions of traders. We are also happy to answer questions in the comments to the article. 
The difference between the volume of the total number of open buy and sell orders is called the ratio of open positions. On this page you will find the ratio of all available information on the positions of traders in various brokerage companies and dealing centers.
You need to be able to use this information correctly and not enter into a transaction based solely on where this moment most positions open. This trade does not always work. Need to combine this analysis with additional indicators and filters. Use information on open positions only as a additional factor in the analysis.
Ways to use this information:
1. To the side most open positions. If you see that on most brokers at the moment for a certain pair the number of buy orders is greater than the number of sell orders, then you decide to open a buy order. Example: EUR/USD currency pair, 75% buy orders, 15% sell orders. It is best to consider only buy orders in this situation.
2. Towards the least number of open positions. Many traders believe that if everyone is waiting for the price to go up, it must definitely go against everyone, at least for a small number of points or turn around completely, since the market cannot allow all traders to earn at the same time. And this theory is partly true, but like the first method, there may be failures.
Choose the style that best suits you, make observations and do your own analysis on .
Open positions of Forex traders from 8 brokerage companies
(Alpari, Dukascopy, FiboGroup, FXFactory, Oanda, InstaForex, MyFxBook, Saxo Bank)
The ratio of open positions of XTRADE broker traders
*The above shows the average value of the ratio of the number of open positions for the instruments: AUDUSD, EURUSD, GBPUSD, NZDUSD, USDCAD, USDCHF, USDJPY, Oil, Gold.
Open positions of Forex traders with InstaForex broker
Traders' open positions from the myfxbook service for all currency pairs and indices