The main types of strategies

Every day, millions of buy and sell deals are made on financial markets. Today, the daily volume of operations exceeds $ 10 billion per day. Profit bidders receive due to the difference in rates. Everyone has their own strategies and systems that allow them to receive stable profits.

Today, with the active development of technology, more and more new trading strategies are appearing in financial markets. Each trader uses his own strategy, which differs in terms of the transaction, used instruments, risk, trend and other parameters. In general, each strategy has its own characteristics that are suitable for certain people.

By time, strategies are divided into 3 main groups:

Long term;

Medium term;

Short term.

Long-term they name those strategies whose retention period starts from 7 days and ends with 1 year or more. This group of strategies is one of the safest, it is used mainly by professionals. I mean hedge funds, investment companies and individuals with vast experience and money.

Medium-term strategies are similar in some respects to long-term ones, but they hold transactions for no more than 1 trading week (5 days).

In short-term strategies, transactions generally last up to 1-2 days. Now this type of strategy is very popular, as it does not require in-depth knowledge and experience. Short-term strategies are divided into 2 groups:



Intraday strategies are when a trader opens deals, with their mandatory closure at the end of the day. The strategies of this group are risky enough, but they are very profitable. The advantage of such strategies is a very quick profit, which can be formed as a result of any economic or political factors. The main disadvantage of these strategies is intraday noise and fixed costs (spreads, swaps, slippage, stop loss, communication services, etc.).

Scalping is one of the youngest and most complex trading systems on the market. It requires constant monitoring and skill. Scalping strategies involve ultra-fast profits in a very short time. Some professionals open daily from 100 to 1000 trade transactions, lasting from 0.1 second to 1-2-3 minutes. With such trading, a clear action plan and proper money management are required.

According to the system, trading strategies are divided into 7 main groups:

Indicator strategies;

No indicator;



Wave strategies;

Universal strategies;

Hedging strategies.

Indicator strategies are strategies based on technical indicators. They are ideal for beginners who are just starting their journey in trading. There are many indicators on the market, you can find the most basic ones in your terminal.

Without indicators these are strategies that do not include any technical or mathematical indicators. As a rule, traders working without indicators open their transactions on the understanding of the market, analyzing charts with some other analysis tools.

Graphic strategies are one of the varieties of classical technical analysis that was used as early as the 20th century. These strategies are based on classical patterns of the type: head and shoulders, double-triple top / bottom, wedge, triangle. The main tool for graphical analysis is the support / resistance lines, which the trader builds on the chart. Since the market vision is different for everyone, each trader sees the market in his own way. For example, if we take 5 traders and give them the task to make a graphical analysis of one currency pair. What do you think will happen?

It will happen that all 5th traders will have different patterns. One will have triangles, the other has a head and shoulders with peaks and troughs, the third will have rectangles. Who do you think is wrong? The answer is, everyone is right in their own way and everyone has the same chance of making a profit.

The fourth group of system trading strategies is channel strategies. The word channel itself tells us that the price of the instrument is stuck in the corridor, which is formed on the basis of psychological levels. A flat system involves trading from one level to another. This strategy is very popular in the forex currency market.

Wave strategies are strategies based on classical wave analysis. This type of trade was invented by a well-known economist / trader, Mr. Elliot. He created a theory suggesting that market behavior depends on the psychology and nature of its participants. Wave strategies include a special cycle with zigzag-shaped directions and recessions, while all this has a certain pattern.

Hedging strategy A system in which the priority is not to maximize profits, but to protect already earned funds from various surprises.

And the last systemic trading strategy is universal or as it is also called a combined strategy. Universal strategies include combining 2 or 3 trading strategies into a single one.

According to the trend are divided into:


Counter trend.

Trending Strategies is A trend is a market direction, its style, its movement. Surely you have heard phrases such as “The trend is your friend and never move against the trend.” The essence of strategies that work according to the trend is to correctly enter the transaction at the moment the trend is created and in the middle of the trend, it is worth leaving at the moment the trend goes out. The market does not stand still, it is constantly moving. To consistently make money in the market, you need to constantly develop and move forward.

The opposite of trending strategies is counter-trending strategies. They are used mainly by highly qualified traders who know and understand the market. Counter-trending strategies are strategies that work against the trend. As a rule, to conclude a deal against the trend, traders have an impulsive movement, which will then give a pullback, on which counter-trend strategies specialize. With the correct definition of this moment, bidders can earn double profit. Earn the first part according to the trend, the second on the U-turn and on the correction.

For successful trading, it is advisable for a trader to study all types of forex strategies, their advantages and disadvantages, and choose their own. Each strategy has its pros and cons, you just have to determine your trading style and adhere to it constantly. To maximize the use of trading strategies, you need to create a whole system.