The 5 Most Popular Trading Strategies You Should Know

 The number of trading strategies is huge. Some work great, while others are poor. Today we will take a closer look at 5 popular strategies that are worth getting to know better. It is possible that you will find the one that is right for you.


The momentum strategy sounds simple (but it is not so easy to implement) - the trader waits for the asset to start violently and then opens a trade. An asset can move in any direction, and you can open both long and short positions.

It is worth paying attention to both technical and fundamental factors that cause significant movements in the market. In the case of Western companies, pay attention to earnings reports and important news, since the share price is affected in both cases. Technical factors play an equally important role in the world of currency and cryptocurrency trading. Fundamental analysis may not provide an explanation for a strong uptrend or downtrend.

To protect yourself from serious losses, you should apply stop loss orders. If the price moves in the opposite direction, the trade will be opened automatically, which will help in risk management.


Several small wins can be as good as one big win. Using this strategy, traders set buy and sell margins, open a trade, and watch the asset price move in the desired direction. Scalping is accompanied by short trades, up to several seconds. The scalper needs to be ready for quick action and make financial decisions instantly. It should be noted that scalping does not involve fundamental analysis due to extremely short timeframes.

Pullback trading strategy

In this case, the trader finds an asset (company stock or ETF) that is in a positive trend and waits for it to move in the opposite direction. Keep in mind that this is not an impending negative trend, but a short-term correction. You need to open a long position when the correction comes to naught, and the price movement should go up again. The same is done on a negative trend. Wait for a downtrend showing a short upward move (again, not a reversal) and enter a short position when the price is at the high.


Remember the support and resistance levels? This strategy involves using them. Usually, when the price of an asset reaches a certain limit that it cannot overcome (this position is called a resistance level), a rebound will occur and the asset will trade below this level. However, as many experts of technical analysis believe, when the price of an asset overcomes the resistance level, the stock price will continue to rise. Sometimes the price can move freely above or below the resistance level and this strategy stops working.

Trading on the news

Perhaps the most interesting strategy for those who love fundamental analysis. We all know that important news and events are extremely important in the world of trading. Almost any asset - national currency, cryptocurrency, stocks, commodities - is driven by major political / economic events. Good news usually moves the asset price higher, bad news lower. If everything is so simple, why is it difficult to trade on the news. Difficulty in correctly predicting news before it hits the market. Sometimes the behavior of the markets does not lend itself to logical behavior, and positive news can also lead to a drop in prices. You also need to be prepared for this.

 Regardless of the strategy you choose, there are several important things to note. No strategy works flawlessly, each one from time to time leads to negative results. Try a few different strategies, find the one that works for you, and learn to use it to perfection. Several losing trades in a row does not mean that the strategy is not working. Most likely, this means that you have entered a losing streak. The constant change of strategies reduces the chances of success. At the same time, don't be afraid to abandon a particular strategy if it really stops working.

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