Traditional Strategies
To most traders, strategy is synonymous with trading techniques—one or more of
the many flavors of price charts or indicators such as oscillators and moving averages.
In GSIFTS, strategy refers to the three primary elements that define a trader:
trading techniques, money management, and the soft elements of market selection,
trader profile, tactics, and psychology. Together they compose a trader’s style.
A traditional trading strategy includes a charting technique such as point
and figure or candlestick charts, a number of technical indicators, and perhaps
a few other tools the trader has found useful in previous trading. Money management
is typically an ad hoc set of rules for limiting losses, maximizing gains,
and entering and exiting a trade. Most traditional strategies rarely consider
style, or soft elements, in any depth.
Traditional strategies represent a linear approach to trading. Each strategic
element is separate from the other. The elements don’t communicate very
well, if at all, with each other. The codex approach, introduced herein, applies a
process paradigm to the elements and to trading.