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Strategies by Positional traders

  • Breakout Strategy

    Breakout Strategy

    • Breakouts are one of the most common techniques used in the market to trade.
    • They consist of identifying a key price level and then buying or selling as the price breaks that pre determined level.
    • The expectation is that if the price has enough force to break the level then it will continue to move in that direction .
    • The concept of a breakout is relatively simple and requires a moderate understanding of support and resistance.
    • When the market is trending and moving strongly in one direction, breakout trading ensures that you never miss the move.
  • Range Trading Strategy

    Range Trading Strategy

    • Reversals are generally used by technical based traders during times of little fundamental activity.
    • At these times the markets tend to ‘range’ or move sideways with no clear direction.
    • Traders look for key price levels that they can use to trade directly from in expectation of a ‘bounce’ when price hits it.
    • These bounces provide small, quick opportunities to take a profit from low volume market activity.
    • Common levels used by traders with this type of strategy include, old highs and lows from previous trading sessions, Pivot point levels, Fibonacci levels and areas at which all three of these levels overlap.
    • These overlaps are known as confluences, and these provide excellent areas at which to look for the price to bounce from during the session.
  • Retracement Strategy

    Retracement Strategy

    • Retracements require a slightly different skill set and revolve around the trader identifying a clear direction for the price to move in and become confident that the price will continue moving in.
    • This strategy is based on the fact that after each move in the expected direction, the price will temporarily reverse as traders take their profits and novice participants attempt to trade in the opposite direction.
    • These pull backs or retracements actually offer professional traders with a much better price at which to enter in the original direction just before the continuation of the move.
    • When trading retracements support and resistance is also used, as with breakouts.