Position Trading Strategy for Beginners: A Breakdown of How it Works

As a beginner, it’s easy to feel overwhelmed by the sheer number of trading strategies and conflicting information out there. It’s tough to know where to start when everything seems so complicated.

But what if there was a trading strategy that simplified things, helping you focus on clear market patterns and structure? With this approach, you could cut through the noise, reduce emotional trading, and increase your consistency.

In this post, we’ll explore The Market Symmetry Strategy, a powerful method that leverages the natural order of the markets. We’ll break down how it works and why it can benefit both beginners and seasoned traders alike. Let’s dive in!

Full Disclosure: I am learning this strategy from the professional trader The Great Mattsby. He offers a ton of great analysis on his X account and YouTube channel, and has a paid group on Patreon which I am now a member of. Here are his links:

• The Great Mattsby on X
• The Great Mattsby on Patreon
• Cantonese Cat on YouTube

The Edge: Recognizing Market Symmetry

The edge of this strategy lies in recognizing market symmetry on every chart. Markets tend to move in patterns, repeating themselves over time, and once you learn to identify these patterns, you can let the charts do what they are supposed to do without getting emotionally involved in your trades.

The more you study and apply this, the more you’ll see that every chart follows this rhythm, allowing you to trade with confidence and a clear strategy. This symmetry enables you to anticipate price movements and know where to enter and exit trades, making the market less intimidating.

How the Market Symmetry Strategy Works

This strategy is built on several key components, all working together to give you the tools and insights needed to make informed decisions. Here’s how it works:

1. Buy at Support and Backtests After Breakouts

The core of this strategy is buying at support levels or during a backtest after a breakout.

• Buying at support: You enter the trade at areas where the price has proven to be a support level. These are strong levels where demand tends to push prices back up.
• Breakouts and backtests: When a price breaks through a key resistance level, it may come back to retest that level or a close support level before continuing higher. This retest is called a backtest, and it often presents a great opportunity to enter a trade with confirmation that the breakout is valid. When key levels are broken with engulfing candles, it is a indication that price wants to move in that direction.

2. Use Dollar Cost Averaging (DCA) in Bull Markets

In a bull market, you can employ Dollar Cost Averaging (DCA) to build your position:

• DCA up and down at support levels: When the price drops after your initial entry at support, you can buy more at a lower support level, reducing your average cost. Since you’re confident in the support range, and the overall chart is bullish, this increases the potential upside when the price bounces back. You can also DCA as the stock is increasing.
• Only in bull markets: This strategy emphasizes DCA only in bull markets, where prices are generally trending upward. In bear markets, it’s advised to exit losing positions instead of trying to add more, protecting your capital.

3. Be Patient and Avoid Overtrading

Patience is a crucial part of this strategy. Many traders lose money by chasing trades or overtrading out of boredom or impatience. The Market Symmetry Strategy emphasizes waiting for the right conditions—whether it’s a support level, breakout, or backtest—before entering a trade. By sticking to this discipline, you avoid unnecessary risk.

4. Confluence Between Log and Linear Charts

Using both logarithmic and linear charts helps in confirming your trades with greater conviction:

• Log charts are helpful for analyzing long-term price movements, especially in stocks or markets that have seen exponential growth.
• Linear charts provide a more straightforward look at shorter-term price action.

By combining both perspectives, you can validate your entry points, support levels, and breakout zones, increasing the accuracy of your trades.

5. Be Comfortable with Discomfort

A key mental component of the strategy is learning to be comfortable buying when it feels bad. Some of the best trades come when the price is down, and emotions tell you to avoid the trade. By focusing on the structure of the market and trusting your support levels, you can confidently enter these trades knowing that the discomfort is often a signal of opportunity.

6. Take Profits When You Want

This strategy also emphasizes taking profits when you feel comfortable. You don’t need to wait for a perfect top or hold out for every last penny of profit. Locking in gains when the market gives them to you helps reduce the stress of holding trades too long and lets you move on to the next opportunity.

7. Momentum Trading in Bull Markets

The strategy works particularly well in bull markets where momentum is strong. As a momentum trader, your goal is to build strong positions during giant uptrends, taking advantage of the market’s upward force. By following the market’s rhythm and focusing on momentum, you reduce the risk of fighting against the trend.

How Do You Find Support, Breakouts, and Backtests?

Finding the right levels for buying support, breakouts, and backtests is crucial to this strategy. This can be done using several technical indicators and an understanding of market structure:

• Ichimoku Clouds: These help visualize potential support and resistance levels, providing insights into trend strength and momentum.
• Fibonacci Levels: These are great for identifying support and resistance zones where prices tend to reverse or consolidate after a retracement.
• Gann Charts: Based on geometric angles and time-price relationships, Gann charts help you identify strong support and resistance areas, particularly useful for spotting breakout and backtest opportunities.
• Market Structure: Understanding how markets form higher highs and higher lows (in an uptrend) or lower lows and lower highs (in a downtrend) helps you predict price movements and identify critical support or breakout points.

By combining these indicators and market structure, you can consistently find high-probability entry points, allowing you to trade with confidence.

Why This Strategy Works

The Market Symmetry Strategy is designed to eliminate emotional trading by focusing on the predictable patterns and symmetry found in all charts. This allows you to trade with more precision, avoiding the pitfalls of impulsive decision-making. The strategy works by emphasizing the following:

• Recognizing patterns and symmetry in the market.
• Patience and discipline, waiting for the right moments to enter trades.
• Using DCA in bull markets to maximize profit potential while avoiding risky trades in bear markets.
• Trusting in market structure and technical indicators to find support, breakouts, and backtests.

Conclusion

The Market Symmetry Strategy is a powerful approach that leverages the natural patterns in the market to make confident, well-timed trades. By focusing on support, breakouts, and backtests, and using tools like Ichimoku Clouds, Fibonacci levels, and Gann charts, you can identify strong trading opportunities. Combine this with patience, careful risk management through DCA, and a focus on bull market momentum, and you have a strategy that allows you to trade without fear and with greater consistency.

As a beginner, this strategy will help you cut through the confusion of the markets and focus on predictable, reliable patterns that can lead to long-term trading success. Once you recognize the market symmetry, you can trade with confidence, knowing that the charts are doing exactly what they’re supposed to do.