Trading strategies explained

1. Trend following

Trade in the direction of the dominant move. Usually defined with moving averages (price above the 50 EMA, for example) or with higher highs and higher lows. It works best in markets with a clear direction.

2. Pullbacks

Wait for price to retrace within a trend and enter at a better price, often in the 38.2%–61.8% Fibonacci zone or at a moving average. Stops are tighter and reward-to-risk is better.

3. Breakouts

Enter when price clears a relevant level — the previous day high or the Asian range — expecting continuation. False breakouts are common in low-liquidity hours and must be filtered.

4. Range trading

Buy near support and sell near resistance while the market moves sideways. The stop goes outside the range.

5. Mean reversion

Bet that an extreme move will return towards its average, for example when price tags the outer Bollinger Band with an extreme RSI. It is the most demanding in terms of risk management.

How to choose yours

Pick one, write it down as three rules (entry, stop, target) and practice it at least 100 times. The best strategy is the one you can execute with discipline.

Frequently asked questions