Knowledge base
50 classic trading methods
Start with one family. Open one method. Read what it bets, how the rule is written, and when it fails.
Trend following12
It bets that a direction already underway will continue. Most of the losses come from chopping back and forth when there is no trend.
01 Turtle TradingHow does Turtle Trading work? 02 Four-week ruleIs the four-week rule the same thing as Turtle Trading? 03 Dual moving-average crossoverWhat is a dual moving-average crossover actually deciding? 04 Triple moving-average alignmentWhat extra confirmation does triple moving-average alignment add? 05 Guppy multiple moving averageIs GMMA watching a cross, or watching the groups open? 06 IchimokuWhich conditions does Ichimoku need at the same time before it counts as a trend? 07 Parabolic SARWhy does Parabolic SAR flip back and forth in a chop? 08 ADX and directional movementDoes a rising ADX tell you to go long? 09 SuperTrendWhat is a SuperTrend flip tracking? 10 Chandelier trend followingDoes a chandelier exit count as a trading method on its own? 11 Time-series momentumDoes time-series momentum look at its own past, or at a ranking against others? 12 Multi-market trend followingIs multi-market trend following the same method as a moving average on one coin?Breakout10
It bets that once a range or a contraction opens, price will leave where it was. False breakouts are the usual cost of this family.
13 Donchian channel breakoutWhat price is a Donchian channel breakout waiting for? 14 Opening range breakoutWhich stretch does the open mean in an opening range breakout? 15 Narrow range 7 breakoutWhat does NR7 wait for before the breakout? 16 Bollinger squeeze breakoutAfter the Bollinger bands narrow, do you trade with the breakout or back toward the middle? 17 Keltner channel breakoutHow does a Keltner channel breakout differ from a Bollinger breakout? 18 Swing high and swing low breakoutWhich bar is the prior high in a swing high and swing low breakout? 19 Volatility contraction breakoutWhich contractions separate a VCP from an ordinary breakout? 20 Gap continuationAfter a gap, why do some people trade with it while others wait for it to fill? 21 Flag breakoutWhich move is a flag breakout continuing? 22 Inside bar breakoutWhich bar's range does an inside bar breakout break?Mean reversion10
It bets that price, after leaving its usual level, will come back. In a one-way market, that return comes late, or it does not come.
23 Bollinger band mean reversionIf price touches a Bollinger band, is that a reason to fade it? 24 RSI overbought and oversoldWhen RSI reaches 70 or 30, does price turn around? 25 RSI(2) short-term reversionWhy is RSI(2) so often the opposite of shorting just because the reading is oversold? 26 KDJ stochasticDoes a KDJ cross up mean oversold, or does it mean location? 27 CCI extreme reversionWhen CCI crosses 100, is a trend starting or a reversion starting? 28 Grid tradingWhere does grid trading's profit come from, and where does the inventory risk sit? 29 Gap fillHow does gap fill bet that the gap will finish? 30 Turtle SoupHow does Turtle Soup use the failure of Turtle Trading? 31 2B false breakoutWhich price, broken again, separates a 2B false breakout from Turtle Soup? 32 Range fadeHow does a range trade show that the market is still a range?Momentum and rotation6
It bets that recent relative strength will last for another stretch. Change the window, and momentum and reversal can become opposite conclusions.
33 MACD crossoverDoes a MACD cross up say that price is cheap, or that momentum has turned? 34 Cross-sectional momentumWhy does cross-sectional momentum need a basket? 35 Long-window high momentumDoes 52-week-high momentum measure the size of the gain, or how close price is to the high? 36 Short-term reversalWhy can short-term reversal and momentum both be true at once? 37 Relative-strength rotationIs relative-strength rotation the same thing as RSI? 38 Triple screenWhat mistake does each of the three screens rule out?Adding size2
These two do not say where to enter. They say how large the next trade is after a loss or a gain.
39 Anti-martingale pyramidingWhat does anti-martingale pyramiding do while the trades are winning? 40 MartingaleWhy can a martingale backtest look smooth, and then fail once?Relative value6
It bets that the relationship between two prices will return to where it was, rather than betting the direction of a single price.
41 Pairs tradingWhich relationship between two prices is pairs trading betting on? 42 Statistical arbitrageDoes statistical arbitrage differ from one pair in scale, or in the bet? 43 Spot-futures basisWhat price difference does a cash-and-carry basis trade lock? 44 Calendar spreadWhy can a calendar spread ignore whether the market is rising or falling? 45 Funding-rate collectionIs collecting the funding rate an arbitrage that ignores direction? 46 Cross-exchange spreadWhen the same coin prints two prices on two exchanges, can the gap be taken as profit?Price structure4
Swings, candles, or the prior day's high and low are written down as a location rule. One pattern on its own usually has weak follow-through.
47 Double bottom and double top breakoutWhen do two lows become a double bottom that can be traded? 48 Engulfing reversalIs one engulfing candle enough to be a reversal system? 49 Pivot pointsAre pivot points a forecast, or a map of the prior day? 50 Support and resistance flipAfter support breaks, why do some people wait for a bounce and then sell?Nothing matches.