#ArbitrageTradingStrategy A trading strategy is a systematic approach to buying and selling financial instruments, designed to generate profits. It typically involves defining entry and exit points, risk management rules, and the instruments to be traded. For instance, a "trend-following" strategy aims to profit from sustained price movements, buying when a trend is established and selling when it reverses. Conversely, a "mean-reversion" strategy assumes prices will return to their average, buying when an asset is oversold and selling when overbought.

Key components include clear objectives, quantifiable rules, backtesting (evaluating the strategy against historical data), and strict risk management, such as setting stop-loss orders to limit potential losses. Successful implementation requires discipline and continuous adaptation to market conditions.