A directional strategy is a type of trading or investment strategy that involves taking a bullish or bearish view on a particular asset or market.
This means that the strategy is based on the expectation of the asset or market moving in a specific direction, either up or down.
Directional strategies are typically used by traders and investors who are trying to profit from market movements. They can take various forms, including long positions (where an investor buys an asset with the expectation that its price will increase), short positions (where an investor sells an asset with the expectation that its price will decrease), or a combination of both.
Some common examples of directional strategies include trend-following, momentum trading, and breakout trading. These strategies often involve using technical analysis, fundamental analysis, or both to identify market trends, momentum, or key price levels, and to make investment decisions.
See also
Trading strategy
Active strategy