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Trading Strategy
FundamentalsA documented set of rules defining how to find setups, enter positions, manage risk, and exit trades. A complete strategy removes discretion and enables consistent, repeatable execution.
Related Terms
Trading System
A complete framework that combines a trading strategy with risk management rules, position sizing, portfolio-level controls, and execution procedures.
Trading Edge
A statistically validated advantage that produces positive expected returns when applied consistently over many trades.
Backtesting
Testing a trading strategy against historical data to evaluate how it would have performed.
Entry
The price and moment at which a trader opens a position.
Exit
The price and moment at which a trader closes a position.