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Basic types of rational trading strategies

The life of a trading system is decided by trading strategies.  There are several basic types of rational trading strategies.


1. Value-based strategy

That is focusing on the intrinsic value of the stock. One of the most well-known practitioners is Warren Buffett, who looks for investment opportunities entirely on the fundamentals of the company.


2. Trend-based strategy

Generally speaking, it's all about chasing the trend.


3. Energy-based strategy

The previous trend type focuses primarily on price changes, while the energy type focuses primarily on trading volume.


4. Cyclical strategy

Spiral is the most common development route in the world, and the stock market is no exception. A spiral is a cycle.


5. Change-based strategy

A sudden change in price often means good opportunities for decisions.

The so-called "basic" means that it is something that is abstractly summarized in an ideal model. In practice, it is not necessary to say that there is only one basic strategy. The combination of different strategies into a trading system generally help produce better and even surprisingly good results.

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