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A trading strategy is basically any set of rules on the basis of which decisions are made about entering certain markets. The range of different strategic approaches is as wide as the number of strategies used daily in the financial markets. A definition of trading strategies.

CFD brokers for every trading strategy

There is a suitable CFD broker for every trading strategy - from the lowest spreads and transaction costs for the preferred underlyings to the maximum leverage, the financing costs and the security systems and deposit protection of the trading account.

Definition: what is a trading strategy?

In the broadest definition, a trading strategy is at least one rule whose execution leads to transactions. Accordingly, a trading strategy exists if an investor determines to buy the shares with the lowest price-earnings ratio from the German share index in every first trading week of a year.

Likewise, a strategy can provide for always buying the ten European stocks with the highest price momentum. In practice, a more detailed definition is required. Thus, a distinction must be made between manual and mechanical systems, between quantitative and technical strategies and between chart-technical and market-technical approaches.

Manual or mechanical?

Manual trading systems are mostly quite straightforward sets of rules that can be easily implemented without computer-aided execution. Typical of manual strategies is a small number of necessary and sufficient conditions with which a trading signal is qualified.

Here is another interesting point to manualtrading systems from exnessthai: นอกจากนี้กลยุทธ์การซื้อขายด้วยตนเองใน วิธีฝากเงิน Exness มักใช้กับตลาดจํานวนน้อยเท่านั้นเนื่องจากการตรวจสอบอย่างต่อเนื่องของเครื่องมือจํานวนมากเกี่ยวข้องกับความพยายามอย่างมาก.

In addition, manual trading strategies are usually applied to only a small number of markets, as the constant monitoring of a large number of instruments involves a great deal of effort.

Mechanical trading systems, on the other hand, are usually based on very complex sets of rules or algorithms. With software support, a large number of markets can be searched for the presence of necessary and sufficient conditions.

Due to the technical support, it is also no problem if a trading signal is only triggered when a dozen or more characteristics are present.

Quantitative or technical?

With the above description of mechanical trading systems, most traders might think of technical indicators. However, this is not necessarily the case. Mechanical trading systems can also be based on fundamental data and evaluate these automatically and match them with a set of rules.

Such approaches are also called quantitative trading strategies.

For example, it can be determined that under the secondary condition of an incipient economic recovery, cyclical shares with a favourable balance sheet valuation are bought in a targeted manner.

The mechanisation of implementation in no way precludes recourse to fundamental data. For private investors, however, quantitative trading strategies are hardly implementable due to the considerable research and analysis effort.