strategy and tactics ?

Here comes another silly thread.

I've read in the past ( and currently ) that strategy and tactics are somehow different from each other. I don't know what the difference is.

All I can come up with is, my strategy is where I enter the market, and tactics are how I enter,and exit the market - market, limit,stoplimit orders.

So I guess what I'm asking is, what are the components of a trade that go into each?

What do ya think? Any help would be appreciated.

 

This is a very broad response without regards to specifics of trading - but my understanding is that tactics are specific tools for implementing a strategy. Example of a value investor:

Strategy: Buy companies that exhibit relative value
Tactic: Look at companies with an EV/EBITDA ratio less in the bottom 1/3rd of their industry

Maybe that is an oversimplification, and not helpful, but that's my understanding....


For a momentum trader it might look like:

Strategy: buy companies that are exbiting momentum
Tactic: Wait for a cup and handle to form and place a buy stop above the handle's pivot point

 

http://www.elitetrader.com/vb/showthread.php?s=&postid=429583&highlight=tactics#post429583
"Orthogonality and the DRY Principle"

Let's consider an other example where orthogonality in trading could be searched: the forum is untitled "Strategy" but it can be useful to make the distinction between strategy and tactics. According to Britanica

"In the theory of warfare, strategy and tactics have generally been put into separate categories. The two fields have traditionally been defined in terms of different dimensions: strategy dealing with wide spaces, long periods of time, and large movements of forces, tactics dealing with the opposite. Strategy is usually understood to be the prelude to the battlefield, and tactics the action on the battlefield itself."

<font color=red>By doing so we are "layering" the trading approach so that the tactics layer won't interfere too much with the strategic layer</font>. We can consider for example that the strategic layer is the upper scale above our chosen trading scale and tactics the lower scales.

 

I should develop one day but now I'm too lazy

 

Don't know why you posted this twice, but Demaray is correct. The strategy is your general approach, such as buying or shorting retracements. Your tactics are exactly how you go about it.

 

I didn't mean to make two threads, but some how I did.

I've ask Richtrader to delete one.

Sorry for the screwup every body.

 

In other words a strategy is meant to make you STICK TO YOUR PLAN whereas TACTICS is meant to make you ADAPT to the real conditions but within the constraint imposed by the strategy.

 

OK, I think I got it now.

Tactics are just the step by step details of a trade, from entry to exit.

Stratagy is the steps leading up to the entry.

Thanks.