Market participants have to confront a stark asymmetry. There are many ways to lose money, but there appears to be only three ways to make money. Nearly all strategies seem to come down to some variant of momentum or trend following, mean reversion, and carry trades.

Each is associated with different market conditions and require different behaviors and tactics. In momentum trades, one wants to buy what is going up and sell what is going down. The use of trailing stops may be more beneficial than exiting a trade at a pre-determined level. This seems to be the most common of the three strategies.

Mean reversion is the picking of market extremes. It is the opposite of trend following strategies. It requires selling that which has been rising and buying that which has been falling. The mean used can by dynamic, such as a 20- or a 200-day moving average.