Trading · Education
Trading strategies
The complete and accurate map of trading analysis and strategies: how the field is classified, why it's classified that way, what methods and tools exist and how to test them. Find the right path for your profile and go deeper step by step — first on a demo account.
What is a trading strategy
A trading strategy is a set of rules that tells you what to trade, when to enter, when to exit and how much to risk on each position. Without rules, decisions become emotional — and emotions are expensive on the market.
But before the strategy comes analysis — the way you make the decision. And here terms are used very differently from one trader to another. That's why we start with a clear map of the field, anchored in how it is officially organized.
Topic map
How analysis is classified — and why
On the internet you'll find dozens of contradictory classifications. We built ours based on how the field is organized and taught by the institutions that certify it — primarily the CMT Association, the global body that awards the Chartered Market Technician title (a program created in 1985) — and based on the authors who defined each method. Where placement is an editorial choice, because the field itself has unclear areas, we tell you directly. This way you know what you're relying on.
Axis 1
How you analyze — the analysis branch
Axis 2
How long you hold the position — the style
The two axes are independent — you combine them however you want. The myth "technical = short term, fundamental = long term" is false: a position trader can decide purely technically, and a day trader can enter on a fundamental news release.
The six branches of analysis, across three levels
Sentiment analysis
How the crowd is positioned: the COT report, the Put/Call ratio, the VIX index, Fear & Greed.
Coming soonVolume & order flow
VSA, Volume Profile, Market Profile, order flow (footprint, DOM, tape reading).
Market Profile: J. P. Steidlmayer, CBOT, 1985.
Coming soonQuantitative / algorithmic analysisAuto-trading
Statistical models, backtesting, automated trading. We cover it in detail in the Auto-trading hub.
See Auto-tradingIntermarket analysis
Correlations between stocks, bonds, commodities and currencies; relative strength.
John Murphy, the "father" of the field.
Coming soonThis is where most of what people call "strategies" lives. The CMT curriculum groups them exactly this way: classic theories as "classical techniques" and modern structure methods as "advanced techniques" — all within technical analysis, not as separate disciplines.
a single candle = a battle
Steve Nison (1991); origins with Homma, Osaka, 18th century.
Readdirect reading of structure
SMC: Michael Huddleston; repackages the Wyckoff method.
Coming soonshapes from price oscillations
the founding theories
The CMT calls these "classical techniques".
Coming soonmathematical derivatives from price
An editorial choice, which we mention transparently: we placed "Volume & order flow" and "Intermarket" as separate branches, for teaching clarity. Formally, both are related to technical analysis (Murphy even describes intermarket analysis as "a branch of technical analysis"), and order flow is based on market microstructure. We present them separately to make them easier to learn — not to contradict the sources.
Chart analysis, candlesticks and price action — what's the difference?
These aren't three competing methods, but three levels of zoom on the same chart, each containing the other: candlesticks are the bricks, price action is how the wall behaves, and chart analysis is the map of the whole structure. In short: chart analysis tells you where, price action tells you whether and how, candlesticks tell you when.
Where · the general map (static)
Chart analysis
What you draw over the medium-to-long term: support and resistance, trendlines, channels and chart patterns (head and shoulders, triangle, double bottom). It shows you the zones that matter, prepared in advance. Chart patterns are the shape-reading part of it.
Whether / how · the behavior (dynamic)
Price action
What you read at those zones, in real time: structure (higher or lower highs/lows), weakening momentum, whether the level holds or breaks. It uses candlesticks, but looks at the flow across several candles. No indicators.
When · the trigger (micro)
Candlesticks
One or a few candles at the moment the zone is reached: a hammer with a long lower wick, an engulfing candle. They give you the exact entry moment and where to place the stop (below the candle's wick).
Example — how they work one after another, from macro to micro
- With chart analysis you draw the map at least on the timeframe you trade and on a higher one (possibly also a lower one): a trend, an important support level tested several times, a double bottom forming. It tells you where to look.
- When price returns to that support, you watch price action on the timeframe you trade and on a lower one: does a higher low appear instead of a new low? does selling pressure weaken? It tells you whether the level holds.
- You wait for the trigger candle right on the timeframe you trade (a hammer). Only then do you enter, with the stop below its wick.
What do banks, funds and professional traders use?
The most advanced branches on the map above aren't textbook theory — they're exactly the fields institutions work in. They're on the same page; only the level at which they apply differs.
- Quantitative / algorithmic analysisFunds like Renaissance, Citadel or Bridgewater run statistical models and automated execution, not manually made decisions.
- Volume & order flowProfessional desks read the actual order flow (footprint, DOM, Market Profile), not just candle shapes.
- Intermarket and fundamental analysisMacro funds and investment banks (Goldman Sachs, JPMorgan) track correlations between stocks, bonds, commodities and currencies.
- The COT reportPublished weekly, it shows directly how the big institutional players are positioned in the futures markets.
Special strategies
Strategies tied to a specific product
These aren't analysis methods, but strategies linked to a specific instrument or financial mechanic.
Options strategies
Only real, exchange-listed options — not binary options.
Coming soonCarry tradeon the blog
Profit from the interest rate differential between currencies.
Coming soonThe foundation
Three things that aren't strategies — but no strategy works without them
These are the foundation any strategy rests on. You can get everything else right and still lose if you ignore risk, psychology, or start with the wrong account. That's why we keep them separate from strategies.
Risk management
Position size, stop-loss, risk/reward ratio.
ReadTrading psychology
Why traders lose because of emotions.
ReadAccount size
Why the wrong account size complicates any strategy.
ReadFeels like a lot? Start guided
The path for beginners: the first rules, mistakes to avoid, and the right road to a demo account, without getting lost in terminology.
Entry approaches
The logic of a position
Once you have the method, the entry logic follows. The first three are technical logics (based on how the chart moves); session trading is about liquidity and time; and news trading is the practical face of fundamental analysis.
Trend following
You follow the dominant direction (includes momentum).
Coming soonRange trading
You play between support and resistance (mean reversion).
Coming soonBreakout
You enter as levels break.
Coming soonSession trading
London, New York, the currency fixing.
Coming soonNews trading
Scheduled macro events (applied fundamental analysis).
Coming soonTrading styles · Axis 2
How much time you devote to the market
Style is just position duration, independent of method. Note: position trading remains trading — it's not the same as long-term investing, which means actually holding the asset and belongs in the Investments menu.
Scalping
Positions of seconds–minutes.
Day trading
Everything closes the same day.
Swing trading
Positions of days–weeks.
Position trading
A horizon of months — still trading, not investing.
These are the most used methods and strategies, not a complete list — no list is complete, and the market keeps evolving.
From strategy to results
A strategy is worthless until you test it
Knowing a strategy and using it correctly are two different things. This is the path from theory to practice — exactly what we prepare you to do on a demo account, before real money.
The probabilistic edge
Why the series of trades matters, not a single one.
Coming soonBacktesting and demo
You verify the strategy on past data and on demo first.
Coming soonTrader's journal
You record every trade so you can learn from it.
ReadFrom demo to live
You move to real money only after consistent results.
Coming soonHow to choose (and build) your strategy
You're not looking for "the strategy with the biggest profit". You build one that fits you, in four steps — using the very two axes from the map.
Choose the style
Axis 2: based on the time you have and your temperament (table below).
Choose the method
Axis 1: you discover it by trying — stick with the one that feels easier and clearer.
Choose the approach
Based on market conditions: trending, sideways, or breaking a level.
Test on demo
Until you get consistent results. Only then move to real money.
| Style | Time at charts | Decision pace | Fits you if… |
|---|---|---|---|
| Scalping | A few hours a day, maximum focus | Seconds | you have fast reflexes and stress tolerance |
| Day trading | 2–4 hours a day | Minutes | you want a daily rhythm, no overnight positions |
| Swing trading | 30–60 minutes a day | Hours–days | you have a job and analyze in the evening |
| Position trading | A few hours a week | Days–weeks | you think long term, close to investing |
Test any strategy without risking real money
Open a demo account with one of our regulated partner brokers, start with the beginner course, or book a consultation.
The content of this page is for educational purposes only and does not constitute investment advice or a trading recommendation. No strategy guarantees profit, and trading financial instruments involves risks, including the loss of invested capital. Trading.md is a brokerage-introducing firm, a partner of regulated international brokers, and does not provide trading signals.