To the Mean
These strategies rely on the principle that markets tend to return to their average price after extreme fluctuations. Traders use indicators like the Relative Strength Index (RSI) and Bollinger Bands to determine overbought or oversold conditions.
- *Relative Strength Index Strategy*: Buy when the RSI crosses below level 10, and exit when the RSI exceeds level 50. This strategy tracks market fluctuations by identifying when the market has dropped significantly and is likely to rise soon.
- *Bollinger Bands Strategy*: Buy when the stock closes below the lower Bollinger Band, and exit when it closes above the middle moving average. This strategy benefits from price movements outside the bands, which are considered extreme.
- *Countdown Days Strategy*: Buy after three days of decline, and exit on the first day of increase. This strategy takes advantage of market reversals after a series of losses.
Momentum Trading Strategies
These strategies aim to capitalize on market strength by trading in the direction of the trend.
- *Price Channel Breakout Strategy (Turtle Method).