A trading strategy is simply a structured plan that outlines how you’ll make decisions in the financial markets.
Think of it as a navigation map—it guides when to open a trade, when to exit, and what conditions must be met before taking action.
In this guide, you’ll learn about the 9 most widely used trading strategies, how they work, and which ones are suitable for beginners.
Traders around the world employ various strategies, depending on their goals, risk tolerance, and the amount of time they are willing to dedicate to chart analysis. Whether you trade forex, commodities, stocks, indices, or cryptocurrencies, having a structured strategy is essential.
Before we explore the top strategies, it’s important to understand the difference between trading style and trading strategy:
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Trading style = When and how often you trade
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Trading strategy = The method or setup you use to enter/exit trades
Popular trading styles include:
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Scalping
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Day trading
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Swing trading
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Position trading
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Algorithmic/automated trading
Your style determines your time commitment, while your strategy determines the logic behind your decisions.
Most Popular Trading Strategies to Know
Below are the nine most widely used and beginner-friendly trading strategies. Each has its own logic and works in different types of market conditions.
1. News Trading
News trading focuses on taking positions based on major economic announcements or impactful global events. Important news often causes sharp price movements, and news traders attempt to catch these quick spikes.
Examples include:
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Interest rate announcements
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Inflation data
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OPEC meetings
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Geopolitical events or crises
Because the market can become extremely volatile after news releases, this strategy suits traders who can make fast decisions and manage high risk.
2. Trend Trading
Trend trading is about identifying the general direction of the market and trading in the same direction—either upward or downward.
Trend traders use tools like:
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Moving averages
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Trendlines
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Chart breakouts
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Price action
They wait for the trend to be confirmed and often enter on pullbacks. This strategy is comfortable for beginners because trends usually last long enough to catch good moves.
3. Range Trading
Range trading works when a market moves sideways within a fixed zone. Traders buy near support levels and sell near resistance levels.
This strategy uses:
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Support & resistance
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Candlestick patterns
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Bollinger Bands
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Oscillators like RSI or Stochastic
The aim is to profit from price bouncing between the upper and lower ranges until the market breaks out.
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4. Pattern Trading
Pattern trading revolves around identifying repetitive chart structures. These patterns appear across all timeframes and all markets.
Common patterns include:
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Double top / Double bottom
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Head and shoulders
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Cup and handle
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Triangles
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Flags
Pattern traders learn to recognise these formations early and use indicators to confirm entries. This strategy can be advantageous for technically skilled traders.
5. Breakout Trading
Breakout traders wait for the price to push beyond a strong support or resistance zone. Once the level is broken, momentum usually increases, creating opportunities for quick profits.
Breakouts often occur after:
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Consolidation
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Tight price ranges
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Low-volume periods
Once the price breaks the key level, breakout traders enter in the breakout direction and ride the move.
6. Macro Trading
Macro trading focuses on big-picture economic trends. Instead of watching only charts, macro traders analyse:
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Economic growth data
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Inflation
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Interest rates
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Government policies
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Global events
These traders build long-term views and often trade multiple asset classes such as currencies, commodities, stocks, or indices.
7. Carry Trading
Carry trading is popular in the forex market. The idea is to borrow money in a currency with low interest and invest it in a currency with higher interest.
If the currency pair also moves in your favour, the profit becomes even larger. Popular pairs for carry trades include:
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AUD/JPY
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NZD/JPY
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USD/JPY
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GBP/JPY
This strategy is suitable for patient traders with a longer-term outlook.
8. Contrarian Trading
Contrarian traders take positions opposite to the current market sentiment. They believe markets often overreact, and extreme fear or greed creates opportunities.
Examples:
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Buying when everyone is selling
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Selling when the market is overly bullish
This approach can be profitable but requires experience and strong psychological discipline. Even legendary investors like Warren Buffett have used contrarian principles.
9. Mean Reversion Trading
Mean reversion is based on the idea that prices eventually return to their average levels after extreme moves.
Traders using this method look for:
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Overbought situations
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Oversold situations
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Sudden price spikes
Indicators like Bollinger Bands, RSI, and Stochastic are commonly used to identify when a price is likely to “snap back” to its mean.
Which Trading Strategy Should Beginners Choose?
Beginners should avoid using multiple strategies at once. Instead, choose one simple strategy and master it.
✔ Best for beginners:
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Trend Trading
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Breakout Trading
These two strategies are easier to understand, work across all asset classes, and have clear entry and exit rules.
✔ Additional tips for new traders:
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Stick to one asset (like EUR/USD or Gold)
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Focus on one strategy at a time
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Keep a trading journal
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Avoid overtrading
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Follow expert market analysis
Once you gain confidence, you can explore more advanced strategies like pattern trading, mean reversion, or contrarian trading.
Final Thoughts
Trading becomes much easier when you have a structured plan. A clear strategy helps you stay disciplined, avoid emotional decisions, and grow consistently as a trader.
Start simple, learn one strategy deeply, and improve step by step.
Happy trading—and trade smart!