A complete trading strategy generally includes the selection of trading targets, the timing of entry and exit, the management of positions and funds.

According to the participation of people's subjective decision-making and computer algorithm execution in all aspects of strategic decision-making, trading strategies can be divided into subjective strategies and quantitative strategies.

Second, subjective strategy.

Subjective strategy mainly depends on the subjective judgment of investors.

Investors in the futures market make their own judgments by investigating the upstream and downstream, the relationship between supply and demand, and macroeconomic expectations.

Similarly, subjective investors in the stock market make trading decisions through in-depth study of all aspects of the industry and investigation of listed companies in the industry.

In addition, whether in the stock market or the futures market, a large number of subjective investors rely on technical analysis to make decisions.

Third, quantitative strategy.

Quantization strategy mainly relies on computer algorithms for trading.

Investors input the initial trading logic into the computer and use a large number of historical data for statistics and backtesting. On this basis, they make appropriate modifications and sublations to form an acceptable trading strategy. After the strategy is formed, the decision-making conditions are often determined and implemented in accordance with established procedures.

In contrast, some subjective strategies have more advantages in the research depth of a single goal, and expert advice can be provided through in-depth research. Quantitative strategy has an advantage in breadth, because it can handle a large amount of data by using computer decision. In addition, the quantitative strategy will not be affected by the uncertainty of people's state and mood, so it is more strict and accurate to implement.

Fourth, common strategy.

Common quantitative trading strategies can be roughly divided into trend strategy and market neutral strategy. Common trend strategies include double moving average strategy, bollinger band strategy, regression trading method, multi-factor stock selection strategy and so on.

Common market-neutral strategies include statistical arbitrage strategy and alpha hedging strategy. The famous grid trading method is more of a trading method, which can be used in different types of strategies.

Let's briefly introduce these common strategies. Readers who want to know more strategies can get more information through the Internet.

(1) double average strategy

Double moving average strategy is widely used in trend trading. This strategy trades according to the golden fork and the dead fork of two moving averages with different periods. Go long when crossing the long-period moving average (golden fork) on the short-period moving average and short when crossing the long-period moving average (dead fork) on the short-period moving average. The double moving average system can be further extended to the multi-moving average system.

(2) Bollinger Band Strategy

The bollinger band consists of three lines, of which the median line is the moving average, the upper line consists of the median line plus n times (such as 2 times) standard deviation, and the lower line is the median line minus n times standard deviation. The market is long on the line and short off the line.

(3) Return to Trade Law

Returnee trading law is famous for the popularity of commodity speculator richard dennis. This rule covers all aspects of trading, capital and position management, and is a complete trading system. The specific trading mode of this strategy is not clear. For a detailed understanding, please refer to the book Rules of Returnees Trading, especially the appendix at the back.

(4) Multi-factor stock selection

Multi-factor stock selection model is a common strategy in stock trading. The establishment process includes the selection of candidate factors, effective factors and the elimination of redundant factors on the basis of historical data test. Finally, the stocks to be traded are selected according to the factors, and the opportunity to enter the market is determined.

(5) Statistical arbitrage

Statistical arbitrage can be used for cross-species and inter-period arbitrage in the futures market, and can also be used for spread arbitrage between stocks with high correlation. It takes advantage of the fact that there is a price difference or price comparison regression between highly related targets, enters the market when the price difference or price comparison deviates from the equilibrium position, and exits when the price difference or price comparison returns to the equilibrium position.

(6) Alpha hedging strategy

Alpha hedging strategy holds two positions in opposite directions at the same time to hedge Beta risk. In the domestic market, it is very common to do more stocks and short stock index futures. Whether this strategy can obtain excess returns depends on whether the selected stocks have higher Alpha positive values.

(7) Grid transaction method

The core of grid transaction method is the determination of grid spacing and central axis. Let's take the rebar futures contract as an example. At present, the thread price is 3000, so we will establish an initial position, such as 50% position. Then the rebar is sold at 10% for every 50 points of increase and bought at 10% for every 50 points of decrease. Here, 3000 is the central axis and 50 points is the grid width. The benefits of this strategy fluctuate greatly.