Trading · approaches people use

Strategy library

12 well-known approaches, one page each: the idea, the rule as it is usually stated, what it needs from a market, what it costs and when it fails. None of them is recommended, and none has been shown here to be profitable.

Before you read any of them

Each page is a description of an approach people use. It is not a recommendation. No approach works in every market: each one here does well in one kind of market and badly in another, and nobody knows in advance which kind is coming. Nothing in this library has been shown to be profitable, and every chart in it is invented.

Held for minutes to hours

Fast, frequent and expensive.

Many trades for small moves. The spread is paid on every one, so cost decides more here than anywhere else.

Held for days to weeks

One move at a time.

Approaches that try to take a single swing, a single break or a single return to the middle. The holding time depends on the chart they are read from.

Held for weeks to months

Few trades, long waits.

Approaches that trade rarely and sit through large moves against them. The spread matters less; overnight financing and patience matter more.

Held until they break

Two that fail badly.

Grid trading and martingale are not ways of choosing a trade. They are ways of adding to a losing one. They are explained here because people meet them, not because they are sound.

This is a description of an approach people use. It is not a recommendation. No approach works in every market, nothing here has been shown to be profitable, and the chart is invented. The small pictures on the cards are those invented paths, with a dot where a trade opens.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

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