Here’s a simple breakdown of what a trade strategy is, along with common types:
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🔹 What Is a Trade Strategy?
A trade strategy is a planned method used by traders to decide:
When to enter and exit trades
What assets to trade
How much to risk per trade
It helps reduce emotional decisions and improves consistency, especially in fast-moving markets like crypto, forex, or stocks.
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🔹 Common Types of Trading Strategies:
1. Day Trading
Buy/sell within one day
Fast-paced, requires quick decisions
2. Swing Trading
Hold for a few days to weeks
Focuses on medium-term price moves
3. Scalping
Dozens of small trades per day
Aim for tiny profits quickly
4. Trend Trading
Follow long-term market direction
Uses indicators like moving averages
5. Breakout Trading
Enter when price breaks key support/resistance
Often signals new momentum
6. Arbitrage Trading
Exploit price differences between markets
Requires fast execution
7. Position Trading / HODLing
Long-term investment (weeks, months, or years)
Based on fundamentals or major trends
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🔹 Good Strategy Should Include:
Entry rules
Exit rules
Risk/reward ratio
Stop-loss & take-profit levels
Backtesting (test the strategy on past data)