Bad money management can make a potentially profitable strategy unprofitable. Trading strategies estratégia de negociação Forex based on fundamental or technical analysis, or both.

The term trading strategy can in brief be used by any fixed plan of trading a financial instrument, but the general use of the term is within computer assisted trading, where a trading strategy is implemented as computer program for automated trading. Technical strategies can be broadly divided into the mean-reversion and momentum groups. A long short strategy consists of selecting a universe of equities and ranking them according to a combined alpha factor. Given the rankings we long the top percentile and short the bottom percentile of securities once every rebalancing period. A pairs trading strategy consists of identifying similar pairs of stocks and taking a linear combination of their price so that the result is a stationary time-series.

Swing traders buy or sell as that price volatility sets in and trades are usually held for more than a day. Positions are closed out within the same day they are taken, and no position is held overnight. Trading signal is simply a method to buy signals from signals provider, is a very effective strategy to determine the best time to buy or sell a stock or currency pair. Aggregate analysts forecasts are often used in momentum trading strategies. All these trading strategies are speculative.

In the moral context speculative activities are considered negatively and to be avoided by each individual. Usually the performance of a trading strategy is measured on the risk-adjusted basis. Probably the best-known risk-adjusted performance measure is the Sharpe ratio. However, in practice one usually compares the expected return against the volatility of returns or the maximum drawdown. Discretionary Trading requires a great deal of skill and discipline. It is tempting for the trader to deviate from the strategy, which usually reduces its performance. An automated trading strategy wraps trading formulas into automated order and execution systems.