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Let’s look at some examples of strategies. Suppose you're a trend follower. You could use a 50-day moving average to identify the trend. If the price is above the moving average, the trend is up. If it's below, the trend is down. When you see the trend change, you can enter the market. Set a stop-loss order below the recent swing low for added protection. Now, let’s consider breakout trading. You might observe a stock trading within a defined range. Wait for the price to break above the resistance level. Enter a long position when the price breaks out, and set a stop-loss just below the breakout level.
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