Trading Strategy

A trading strategy is a systematic plan that traders use to buy and sell financial instruments, such as stocks, bonds, or commodities, with the goal of making a profit. Trading strategies are based on specific rules and criteria, such as technical indicators, market trends, or fundamental analysis. A well-designed trading strategy helps traders make informed decisions and manage risk effectively by providing a clear framework for action.

Example

A momentum trading strategy might involve buying stocks that are showing strong upward price momentum and selling them once the momentum starts to fade.