Understanding Trading Strategies
A plain-English tour of the major trading strategies — what they actually bet on, when they work, and the specific forces that quietly erase the edge before most traders can capture it.
- 1Part 1 of 9 12 min read
What Is a Trading Strategy? Anatomy of an Edge
What a trading strategy really is: the anatomy of an edge, and the four forces — costs, competition, overfitting and psychology — that erase it before you profit.
Read part 1 - 2Part 2 of 9 10 min read
Trend Following Explained: The Bet and the Risks
Trend following explained: the bet that a price move continues, how momentum traders try to ride it, and why whipsaws and long losing streaks make it hard.
Read part 2 - 3Part 3 of 9 10 min read
Mean Reversion Explained: Betting on the Snap-Back
Mean reversion explained: the bet that a price stretched far from its average snaps back, and why the trend that never reverts can wipe out the gains.
Read part 3 - 4Part 4 of 9 10 min read
Breakout Trading Explained: Real Breaks vs Fakeouts
Breakout trading explained: the bet that once a price clears a key level it keeps running, and why false breakouts and stop-hunting make it so hard.
Read part 4 - 5Part 5 of 9 10 min read
Scalping Explained: Why Costs Swallow Tiny Gains
Scalping explained: the strategy of taking many tiny, very short trades, and why costs, competition with algorithms and execution speed make it brutally hard.
Read part 5 - 6Part 6 of 9 10 min read
Swing Trading Explained: The Gaps That Jump Stops
Swing trading explained: holding positions for days to weeks to catch a larger move, and why overnight gaps, financing costs and slow feedback make it hard.
Read part 6 - 7Part 7 of 9 10 min read
Copy Trading Explained: The Survivorship-Bias Trap
Copy trading explained: automatically following another trader's positions, and why survivorship bias, lag and misaligned incentives make it riskier than it looks.
Read part 7 - 8Part 8 of 9 10 min read
Backtesting & Overfitting: Why Great Backtests Lie
Backtesting and overfitting explained: how strategies are tested on history, and why a perfect backtest is the easiest thing to produce and the weakest proof.
Read part 8 - 9Part 9 of 9 12 min read
Do Trading Strategies Work? The Honest Base Rate
Why most trading strategies fail: the evidence on retail underperformance, why discipline and cost-control outlast any pattern, and what realistically persists.
Read part 9