Modules for Traders
Trading Strategies 2
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Glossary of The Trading Strategies
- Swing trading: It involves taking trades that last a couple of days up to several months in order to profit from an anticipated price move.
- Thematic investing: It is a top-down investment philosophy that uses broad macroeconomic trends to analyse investment options.
- Rupee cost averaging: It helps us to minimise this guessing game. In the rupee cost averaging approach, you invest a fixed amount of money at regular intervals irrespective of whether the markets are going high or low.
- Algorithmic trading: It is the use of process- and rules-based algorithms to employ strategies for executing trades.
- Scalping trading strategy: Traders who use a scalping strategy place very short-term trades with small price movements.
- Trend Trading Strategy: Following the trend is different from being ‘bullish or bearish’. Trend traders do not have a fixed view of where the market should go or in which direction.
- Day trading or intraday trading: It is suitable for traders that would like to actively trade in the daytime, generally as a full time profession.
- Swing trading strategy: The term ‘swing trading’ refers to trading both sides on the movements of any financial market. Swing traders aim to ‘buy’ a security when they suspect that the market will rise.
- Backtesting trading strategy: It is the process of testing a trading hypothesis/strategy on prior time periods. Instead of applying a strategy for the time period forward, which could take years, a trader can simulate his or her trading strategy on relevant past data.
- Growth Investing: It is an active investing strategy that involves analyzing financial statements and fundamental factors about the company behind the stock.
- Core and Satellite: It is a common and time-tested investment portfolio design that consists of a "core," such as a large-cap stock index mutual fund, which represents the largest portion of the portfolio, and other types of funds—the "satellite" funds—each consisting of smaller portions of the portfolio to create the whole.
- The Dave Ramsey Portfolio: Popular talk show host and generally respected personal finance guru Dave Ramsey has long-supported his four mutual fund portfolio strategy for his listeners and fans.
- Tactical Asset Allocation: It is a combination of many of the previous styles mentioned here. It is an investment style where the three primary asset classes (stocks, bonds, and cash) are actively balanced and adjusted by the investor with the intention of maximizing portfolio returns and minimizing risk compared to a benchmark, such as an index.
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