Strategies

5 Most Used Trading Strategies, Explained

Astron Team · 09/24/2026 · 6 min read

Anyone starting to study trading soon runs into a huge list of names: scalping, day trading, swing trading, trend following, position trading, and so on. Instead of trying to learn all of them at once, it's worth understanding the logic behind each one, the time it demands, and the type of market it tends to work best in, before picking one or two to study in depth.

Below are five strategies widely used by stock, currency, and index traders, with a straightforward explanation of how each one works in practice.

1. Scalping

Scalping seeks small profits over a large number of trades, each lasting from seconds to a few minutes. The trader gets in and out of the position quickly, taking advantage of small price swings, usually on highly liquid assets, where the difference between the buy and sell price tends to be small. This strategy demands full attention during the session and quick decisions, which suits someone with continuous free time who handles short-term pressure well.

2. Day trading

In day trading, all positions are opened and closed within the same day, with nothing left open overnight. This avoids the risk of the price moving sharply overnight, but it still requires following the chart for much of the session. Day traders usually use minute charts and rely on price moves that happen within a few hours, which calls for discipline to close the position at the agreed time, regardless of the partial result.

3. Swing trading

Swing trading keeps positions open for a few days to a few weeks, seeking to capture a bigger price move than very short-term ones. Since trades last longer, swing trading demands fewer screen hours per day, which appeals to those who can't follow the market continuously, but it requires patience to let the trade develop and tolerance for seeing the price swing against the position at times before it reaches the target.

4. Trend following

This strategy starts from a simple idea: identify an asset in an uptrend or downtrend and enter in the same direction as the move, instead of trying to predict reversals. Tools like moving averages and trend lines help confirm the prevailing direction. Trend following tends to work well in markets with clear directional moves and to struggle more in markets that move sideways for long periods, without a defined direction.

5. Position trading

Position trading is the longest of the five, with trades that can last weeks or months. The focus here is on broad price moves, usually tied to wider economic or fundamental factors, rather than day-to-day swings. This strategy requires less daily monitoring time, but it calls for capital that can stay allocated for longer and greater tolerance for seeing the price move against the position in the short term, without that changing the original plan.

How to choose between them

None of these strategies is absolutely superior to the others; each one demands a different amount of available time, risk tolerance, and patience. A practical example: R$ 3,000 in capital split across scalping trades, with dozens of entries per day, generates trading costs and wear quite different from the same capital applied to two or three swing trade positions over the course of the month.

Regardless of the chosen strategy, two precautions apply to all of them. The first is to define position size as a small, constant fraction of capital, instead of a fixed amount that loses meaning as capital changes. The second is to always use a stop loss set before opening the trade, because none of the five strategies eliminates the risk of loss, they only organize the timing and the way that risk is taken on.

Before adopting any of these strategies with meaningful money, it's worth testing it first on historical data or with small amounts, whether in stocks, currencies, or indices, including on a platform like Astron, noting the results of each trade. This record is what lets you compare, using real data rather than impressions, which of these five approaches really fits your routine and your risk profile.