There are only a handful of underlying trading strategies — most named approaches are variations of these. Understanding the core families lets you build, test, and improve your own.
Trend following
Buy strength, sell weakness, and ride the move. Trend strategies work when markets are directional and lose money in choppy ranges. They typically have a low win rate but a high reward-to-risk ratio.
Mean reversion
Sell when extended above an average, buy when extended below. Works in ranges; gets crushed in strong trends. Typically has a high win rate but a low reward-to-risk ratio.
Breakout
Enter as price clears a defined level — yesterday's high, a consolidation top, a session range. Breakouts catch the start of a trend but suffer from false breaks in low-volatility environments.
Range trading
Sell the top of a range, buy the bottom, and exit at the mid. Requires a clear range structure and tight risk on a breakout.