In trading the two terms tactic and strategy are not used enough and when they are used many times they are mixed up. Trading tactics are the actual means that are used to achieve a single specific goal or target, but a trading strategy is the big picture plan that combines many different tactics together to achieve the overall objective of your profit and loss statement over a longer period of time. A strategy involves combining all the complex dynamics of a trading system and the decision making structure that guides tactical execution of a trading plan.
A trading tactic is a one specific trading signal or set up that is implemented to achieve a profitable outcome and grow the capital used in that position.
A trading strategy is the type of method you are using in your trading. A trading strategy defines your time frame, the principles that will lead to profitability and your return goals and risk tolerance. Your strategy will create the overall structure for developing your trading system, position sizing, markets traded, and watch list. Your trading strategy could be trend following, day trading, swing trading, or position trading while your specific entry and exit is your tactic.
Your tactics will drill down and allow you to create a trading plan for entries, exits, and position sizing to create a high probability of profits for each individual trade. Combining your tactics together and looking at total risk and possible returns builds a trading system that is your overall strategy with each trade execution being a tactic.
