investment strategy

There are 2 lines of basic investment strategy used to identify opportunities in different markets.

The first of these, technical analysis, uses charts, mathematical analysis, trends, support and resistance lines and so on.

The other, fundamental analysis, uses financial, political and economic information to decide on trading calls.

Under these two main strategy lines there are hundreds of different strategies to choose from.

Also, many use a combination of the two main strategies.

For example, technical analysis trading calls may be overruled by fundamental analysis information.

Investment Strategy – Basic Strategies

There are many examples of successful investors using both fundamental and technical analysis.

Which one you should choose is dependent on what you’ll be most comfortable with.

If you choose fundamental analysis exclusively, you have to follow current breaking news, indicators and financial statements, as well as political trends to make money.

Using fundamental analysis for trading calls requires deep understanding how the markets work and how the markets will react to news.

You can also analyze fundamental information with econometric tools to make trading calls.

If you choose technical analysis, you will have to learn a technical analysis trading style that suits you best.

There are hundreds of technical trading styles to choose from with some using chart patters, others mathematical formulas, for example.

Most of the technical analysis rules have the benefit of being systematical, making testing a strategy on historical data comparably easy.

Investment Strategy – Advanced Strategies

There is a lot to learn from hedge funds for anyone willing to know more about trading strategies in particular.

These strategies are actually sub-strategies to the two basic strategies, fundamental and technical analysis.

Olsen, a Swiss finance research company, has classified hedge funds according to the trading strategies of each one.

According to the company’s classification, there are currently four major trading strategies:

• Event driven
• Long/Short strategies
• Relative Value
• Tactical trading

If you’d like to learn about these strategies, some of these strategies are explained in books. Also, some books offer specific investment strategies and trading techniques based on these trading styles.

Also, to learn about these strategies, mentoring programs may offer mentoring on a specific investment style, especially if you ask to be taught on a single line of strategy.


Risk Disclosure and Terms of Use


From investment strategy page to Investments Guide index