Every strategy in this course must define, before entry: A profit target only Entry, invalidation and exit A news catalyst A leverage level

A trader using a momentum strategy sees price break above resistance with strong volume, but the invalidation level is hit within seconds of entry. What is the correct action according to sound strategy design? Exit immediately at the predefined invalidation point, no exceptions Add to the position since momentum could still resume Wait for the next candle close to decide, ignoring the invalidation rule Move the invalidation level lower to avoid taking the loss

In a mean-reversion strategy, why is a strict definition of "extreme" (e.g., a specific deviation from a moving average) more important than in a momentum strategy? Because mean reversion has no invalidation rules by design Because mean reversion trades rely on fading a measurable statistical extreme, so an undefined trigger removes the strategy's edge Because momentum strategies never require objective entry criteria Because mean reversion trades ignore price levels entirely and use only volume

Day-trading strategies: quiz