Trading Strategies (2024)

Having a trading strategy is crucial to trading success. Without a well-planned strategy, you're leaving yourself open to the whims of the market and your emotions.

Introduction to Swing Trading

Mary Hall

Updated Apr 30, 2024

Early Warning Signs That Function as Exit Indicators for a Trade

Alan Farley

Updated Jan 14, 2022

Trend Trading: The 4 Most Common Indicators

Cory Mitchell

Updated Mar 01, 2024

4 Factors That Shape Market Trends

Cory Mitchell

Updated Mar 17, 2022

Best Online Forex Trading Classes

Richard Best

Updated May 25, 2023

Frequently Asked Questions

What are the different trading strategies?

A trading strategy typically consists of three stages: planning, placing trades, and executing trades. There are lots of different approaches, including day trading, news trading, position trading, scalping trading, swing trading, and more.
Learn MoreHow to Outperform the Market
What are the different types of traders?

The types of traders are very tied to the various trading strategies. For example, fundamental traders focus on company-specific events to determine which stocks to buy and when. Noise traders buy and sell without fundamental data specific to a company. Sentiment traders seek out trends, and market timers try to guess which direction a security will move. But arbitrage traders simultaneously purchase and sell assets in an effort to profit from price differences of identical or similar financial instruments.
Learn MoreWhat Type of Trader Are You?
Which trading strategy is best for beginners?

As a beginner, focus on a maximum of one to two stocks during a session. Following the trends is probably among the easiest strategies for beginners. Anyone who follows the trend will buy when prices are rising or short sell when they drop. This is done on the assumption that prices that have been rising or falling steadily will continue to do so.
Learn MoreBooks for Budding Professional Traders
How do I create my own trading strategy?

The first step into creating your own trading strategy is to determine what type of trader you are, your time frame of trading, and what products you will trade. It is best to see how an asset performed in the past by looking at historical data and charts around the time frame to be traded. Jot down your ideas and then start backtesting them.
Learn MoreBlending Technical and Fundamental Analysis

Key Terms

Nash Equilibrium
Nash equilibrium is a concept of game theory where the optimal outcome of a game is one where no player has an incentive to deviate from their chosen strategy after considering an opponent's choice.
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White Paper
A white paper is an informational document usually issued by a company or not-for-profit organization to promote or highlight the features of a solution, product, or service that it offers or plans to offer. White papers are also used as a method of presenting government policies and legislation and gauging public reaction.
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Random Walk Theory
Random walk theory proclaims that stocks take a random and unpredictable path that makes all methods of predicting stock prices futile in the long run. It considers technical analysis and fundamental analysis undependable.
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Portfolio Turnover
Portfolio turnover is a measure of how frequently assets within a fund are bought and sold by the managers. It is calculated by taking either the total amount of new securities purchased or the number of securities sold (whichever is less) over a particular period, divided by the total net asset value (NAV) of the fund. It is usually reported for a 12-month time period.
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Dawn Raid
A dawn raid refers to the practice of buying up a large number of shares right at the open of the day's trading. The goal is to amass a large number of shares in a target company by one company to influence a potential takeover of the target. Due to the rapid dissemination of price data and exchange and securities regulations, it is difficult to achieve.
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In and Out
In and out is a trading strategy whereby a single security or currency is bought and sold multiple times over a short period. In and out trading can last for a single trading session, or it can last longer but less than the period associated with a buy and hold trading strategy.
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Swing Trading: Definition and the Pros and Cons for Investors

Cory Mitchell

Updated Apr 29, 2024

Best Cryptocurrency Trading Courses

Michael Kurko

Updated May 27, 2024

8 High-Risk Investments That Could Double Your Money

Melissa Parietti

Updated May 28, 2024

White Paper: Types, Purpose, and How to Write One

Adam Hayes

Updated May 15, 2024

Tracking Volatility With the VIX

Lisa Smith

Updated Apr 22, 2022

Explore Trading Strategies

AllBeginnersDay Trading

ISM Manufacturing Index: Definition and How It's Calculated

Carol M. Kopp

Updated Jun 28, 2023

How to Trade Options on Webull

Gordon Scott

Updated Jun 21, 2023

How to Trade 0DTE Options

Gordon Scott

Updated Apr 10, 2024

How to Open a Swing Trade Account

Andrew Grossman

Updated Jun 21, 2023

How to Swing Trade

Andrew Grossman

Updated Jun 21, 2023

4 Best Futures Trading Platforms

Andrew Grossman

Updated Feb 29, 2024

Dividend Capture: Meaning, Criticism, Examples

Cory Mitchell

Updated Jun 18, 2022

Bag Holder Definition and Psychological Analysis

James Chen

Updated Sep 29, 2021

Portable Alpha: What it Means, How it Works

Will Kenton

Updated Apr 29, 2022

Top 3 Stocks for Novice Swing Traders

Kevin B. Johnston

Updated Feb 09, 2022

Scalping vs. Swing Trading: What's the Difference?

Prableen Bajpai

Updated Sep 06, 2022

3 ETPs to Play Buffett's Moat Advantage

Tim Smith

Updated Oct 19, 2022

The Weak, Strong, and Semi-Strong Efficient Market Hypotheses

J.B. Maverick

Updated May 28, 2024

The Turtle Trading Experiement: A Successful Market Legend

Michael Carr

Updated May 03, 2024

Nash Equilibrium: How It Works in Game Theory, Examples, Plus Prisoner’s Dilemma

James Chen

Updated Feb 28, 2024

Leading, Lagging, and Coincident Indicators

The Investopedia Team

Updated May 22, 2023

Hedging With Index-Based ETFs

Jeff Krohnfeldt

Updated May 29, 2024

The Daily Routine of a Swing Trader

Justin Kuepper

Updated Feb 24, 2022

Carry Trade: Definition, How It Works, Example, and Risks

James Chen

Updated Jan 01, 2022

Portfolio Turnover Formula, Meaning, and Taxes

James Chen

Updated Mar 15, 2022

Flipper: What it Means, How it Works, Risks

Adam Hayes

Updated Apr 29, 2022

How to Predict Where the Market Will Open

Lisa Smith

Updated Mar 04, 2024

Random Walk Theory: Definition, How It’s Used, and Example

Tim Smith

Updated Feb 23, 2023

Balanced Investment Strategy: Definition and Examples

Jason Fernando

Updated Apr 06, 2022

When Insiders Buy Should Investors Join Them?

Ben McClure

Updated Jan 17, 2022

Dividend Yield for the Downturn

Ben McClure

Updated Sep 16, 2022

Activist Hedge Funds: Follow the Trail to Profit

Justin Kuepper

Updated Jan 30, 2022

What Type of Trader Are You?

Lisa Smith

Updated Jan 04, 2022

The Short Guide to Insure Stock Market Losses

Trevir I Nath

Updated Aug 25, 2021

Best Strategy for Short-Term Savings Goals

Amy Bell

Updated Aug 25, 2021

How Important Is Tape Reading in Modern Markets?

Alan Farley

Updated Jan 20, 2022

Pure Play: Examples of Niching Down in Investing

Jason Fernando

Updated May 23, 2022

Fibonacci Techniques for Profitable Trading

Alan Farley

Updated Apr 02, 2022

Panic Selling: What it is, How it Works, Models

Justin Kuepper

Updated Jun 30, 2022

How Statistical Arbitrage Can Lead to Big Profits

Justin Kuepper

Updated Oct 26, 2020

Market Timing Tips Every Investor Should Know

Alan Farley

Updated Jan 29, 2022

Blending Technical and Fundamental Analysis

Glenn Curtis

Updated Jun 28, 2022

Are You a Trend Trader or a Swing Trader?

Alan Farley

Updated Jan 01, 2022

How To Outperform The Market

Brian Beers

Updated Oct 19, 2022

Averaging Down: What It Is and When to Use It

Ken Shreve

Updated Jun 04, 2022

Dawn Raid: What it Means and how it Works

Will Kenton

Updated Apr 29, 2022

Net Short: What it is, How it Works, Example

Akhilesh Ganti

Updated May 27, 2022

Pairoff: What it Means, How it Works, Comparisons

Will Kenton

Updated May 10, 2022

Rolling Settlement: What it is, How it Works

Adam Hayes

Updated Jun 21, 2022

Bear Position: What It Means, How It Works

Lucas Downey

Updated Sep 26, 2021

In And Out: What It Means, How It Works

James Chen

Updated May 01, 2022

Swing for the Fences: Meaning, Origin, Example

Tim Smith

Updated Oct 07, 2022

Asteroid Event

Lucas Downey

Updated Sep 17, 2021

Trade Volume Index: Meaning, Formula, Calculation

Steven Nickolas

Updated Nov 09, 2022

What Is the Difference Between a Short Squeeze and Short Covering?

Steven Nickolas

Updated Sep 14, 2022

How Long Can a Trader Keep a Short Position?

Adam Hayes

Updated May 05, 2024

How Does Short Selling Help the Market and Investors?

Adam Hayes

Updated Nov 20, 2023

How the Trailing Stop/Stop-Loss Combo Can Lead to Winning Trades

Glenda Dowie

Updated Jun 19, 2023

Parents and Spin-offs: When to Buy and When to Sell

Larry MacDonald

Updated Aug 23, 2022

Triple Screen Trading System - Part 1

Barclay Palmer

Updated Jul 01, 2022

4 Common Active Trading Strategies

Kristina Zucchi

Updated Mar 29, 2023

What Is the Commodity Channel Index (CCI)? How To Calculate

Cory Mitchell

Updated Apr 30, 2024

The Best Way to Buy Silver

Aaron Levitt

Updated Aug 02, 2023

Introducing the Bearish Diamond Formation

Richard Lee

Updated Jun 30, 2022

Keep It Simple and Trade With the Trend

Selwyn M. Gishen

Updated Jan 05, 2024

Trading

Technical Analysis Options and Derivatives Fund Trading Stock Trading Futures and Commodities Trading Fixed Income Trading Guide to Forex Trading Trading Skills