Trading models are emotionless systems for decision-making in trading that can be automated or just used for reference.
They tend to have logical parameters, such as “if x, then y” which can use popular trading indicators to implement a strategy that might only be used in certain conditions. Trading models are strategies employed with a specific design.
Different trading models will use different technical indicators or types of charts to define and search for certain conditions in which a strategy can be used. Once the conditions are met, the model provides the decision-making logic that is intended to carry out a profitable trade without guesswork or emotion.
Many chartists seek to exploit the emotional inefficiencies of the market, where investor sentiment has pushed prices too high or two low and created a buying or selling opportunity as prices regress back toward the mean or continue their previous trend.
In this section, we will discuss some popular trading models that might even help you construct your own.
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