What is a trading strategy?
A trading strategy is a repeatable set of rules for entering, managing and exiting trades. Learn the basics and how to practise strategies risk-free.
A trading strategy is a defined, repeatable set of rules for when to enter, how much to trade, how to manage risk, and when to exit. Trading without one is gambling; a strategy makes results measurable and improvable.
What a good strategy defines
- Entry — the exact condition that triggers a trade (a breakout, a setup, a strategy structure).
- Position size — how many lots, and how much capital/margin at risk.
- Risk management — your stop-loss and max loss per trade.
- Exit — target, stop, or time-based rules.
Options strategies
In options, a "strategy" often means a structure — combining calls/puts to shape risk/reward (e.g. straddle, strangle, iron condor). Build these visually in the Strategy Builder.
Practise it risk-free
Paper trading is the ideal place to test a strategy across real market conditions with virtual money, then backtest it on history before risking real capital.
FAQ
Why do I need a strategy?
It removes guesswork and emotion, and lets you measure what works so you can improve.
What's the difference between a strategy and a setup?
A setup is the entry trigger; a strategy is the whole plan — entry, sizing, risk and exit.
Where do I build option strategies?
In the Strategy Builder, with a live payoff diagram.