Tradingstrategies
24 strategies in the library — from Buffett's Circle of Competence to short-term breakouts. Explained per strategy: how it works, what to expect and where it goes wrong. Not advice.
1% Risk Rule
Never risk more than 1% of your total trading capital on a single trade. A position-sizing rule, not a method for making profit.
Arbitrage Between Centralised and Decentralised Crypto Exchanges
Use price differences between a centralised crypto exchange (CEX) and a decentralised exchange (DEX). Technical, highly competitive and not risk-free: costs and execution decide whether anything is left.
Breakout Strategy with Volume Confirmation
Buy a stock that breaks through resistance on high volume after a quiet consolidation, with a stop-loss set in advance. False breakouts are common.
Buy and Hold with Index Funds
Invest regularly in a broadly diversified, low-cost index fund and hold it for the long term. Simple, but value can swing sharply and you can lose money.
Chasing Airdrops in DeFi
Use new crypto applications in the hope of later receiving tokens at no charge. High risk: payout is not promised, costs are certain and tokens can fall quickly in value.
Crypto Staking: Rewards and Risks
Locking up crypto to help secure a network and receive a variable reward for it. The reward is not fixed and you bear price, technical and provider risk.
Deep Value Screening (Graham criteria)
You use fixed ratios to look for shares that look cheap compared with their earnings and assets. The method comes from the books of Benjamin Graham. Cheap can stay cheap and you can lose money.
Dividend Growth Investing
You invest in companies that have raised their dividend for years and mainly look at dividend growth. A dividend can be cut or scrapped and the price can fall.
Dollar-Cost Averaging (DCA) in Bitcoin
You buy a fixed amount of Bitcoin at fixed moments, whatever the price. This means you do not have to guess the right entry point. Losses can be large: Bitcoin is highly volatile.
Double Bottom and Double Top Patterns
You trade the W shape (double bottom) and the M shape (double top), two classic chart patterns that point to a possible trend reversal. Patterns fail regularly.
Economic Moat Investing
A long-term approach that looks at companies with a durable competitive advantage, the 'economic moat'. With no guarantee that such an advantage lasts.
Fibonacci Retracement
You use levels such as 38.2%, 50% and 61.8% to judge where a pullback in a trend might stop. There is no proof that these levels predict the price.
GARP: Growth at a Reasonable Price (PEG ratio)
You look for companies whose earnings are growing and whose price fits that growth reasonably well, measured with the PEG ratio. Peter Lynch described this in One Up on Wall Street. Growth can disappoint and you can make a loss.
Head and Shoulders Pattern
You trade the head-and-shoulders pattern: three peaks of which the middle one is the highest, with a neckline beneath. The pattern can point to a trend reversal, but also fails regularly.
Investing Within Your Circle of Competence
Invest only in companies you truly understand and can assess. It limits mistakes from ignorance, but not price risk.
MACD Scalping
Very short trades of minutes based on MACD crossovers shortly after the US market opens. A demanding style where costs weigh heavily.
Mean Reversion Trading
Trading on the assumption that a sharply overextended price moves back towards its average. Works mainly in sideways markets and carries large risks in trends.
Net-Net Strategy (Net Current Asset Value)
Buying shares that trade below the net value of their current assets. A very cautious valuation method from the work of Benjamin Graham, with large practical risks.
On-Chain Whale Tracking
Following large crypto addresses and flows to and from exchanges as extra input for your analysis. The signals are uncertain and not a forecast.
Providing Liquidity in DeFi Pools
You deposit two crypto assets into a liquidity pool on a decentralised exchange and receive a share of the trading fees. You can lose your entire deposit through a hack, fraud or a price fall. Very high risk.
Reflexivity Theory
A way of looking at markets: prices do not only reflect reality, they also influence it. Mainly a way of thinking, not a trading recipe.
Risk Parity Portfolio
A way of building a portfolio in which each component contributes roughly the same risk, rather than the same amount of money. A long-term way of thinking, with no guarantee of return.
The Bitcoin Halving Cycle: What History Does and Does Not Tell Us
Bitcoin halves the miner reward about every four years. Some investors time purchases around this pattern. The pattern rests on only a few cycles and is no guarantee.
Trend Following with the 200-Day Average
A simple trend rule: stay long only while price closes above the 200-day moving average. It may limit losses in falling markets but also gives false signals.