What is a trading strategy?
It's a plan for how you will approach stock trading. Such a strategy provides the objective set of rules for buying and selling, for running positions and for management of available funds. Really detailed trading strategies can be used to model how profitable the strategy in question is likely to prove.
Where have you heard about trading strategies?
As an investor, you may have been counselled by your financial adviser to draw up a proper trading strategy as against relying on vague hunches to guide your market actions. Personal-finance media may refer from time to time to the need for investors to devise credible trading strategies.
What you need to know about trading strategies...
Trading strategies comprise the rules and principles that a trader has set for themselves. They are likely to be quite granular in order to prevent a trader from straying away from the strategy in pursuit of what seem sure-fire opportunities. There are many different trading strategies and some traders will mix and match established strategies to produce one that is uniquely their own. Key to any strategy are the criteria for entering the market and for leaving it, along with strict adherence to the asset selection system contianed in the strategy.