Trading Strategy

Definition - What does Trading Strategy mean?

A trading strategy is a set of defined rules that tell a trader how to enter and exit a trading position. A forex trading strategy is usually based around a particular style, such as swing trading or scalping. Once a trader know the type of trading he wants to do, he can create different trading strategies to fit that style.

ForexDictionary explains Trading Strategy

A trading strategy can usually be summed up in a few lines and a trader may have several strategies to use depending on the market he or she is trading. For example, scalping is a trading style and a scalpers trading strategy will be designed to make small profits (usually less then 15 pips) on price action that gives a certain technical signal.

Trading strategies are often confused with trading plans and trading systems. Trading systems are basically a collection of trading strategies, whereas a trading plan is a comprehensive document that encompasses the trading system along with many other factors.

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