Top 10 Trading Strategies by Legendary Technical and Fundamental Traders

Here’s a look at some iconic trading strategies employed by legendary traders, categorized by technical and fundamental approaches:

Who He Is: A legendary trend follower who proved trading could be taught, Dennis turned $400 into $200 million and trained the famous “Turtle Traders.”
Strategy: Trend Following – Identify and ride long-term market trends using price breakouts and strict risk management.
Key Insight: “Trade your plan and let your profits run.”
Why It Works: By following trends and avoiding emotional decision-making, this strategy capitalizes on large market movements and minimizes noise from short-term fluctuations.

Who He Is: Creator of the CAN SLIM strategy and founder of Investor’s Business Daily, O’Neil combined technical patterns with fundamental analysis to find high-growth stocks.
Strategy: Chart Patterns – Use patterns like the “Cup and Handle” to time entries during bullish breakouts.
Key Insight: Patterns are visual representations of supply and demand dynamics.
Why It Works: Chart patterns provide a systematic way to interpret market sentiment and spot high-probability opportunities.

Who He Is: Known for advancing RSI analysis, Cardwell introduced positive and negative reversals to forecast market direction beyond standard overbought/oversold signals.
Strategy: RSI Divergence – Use divergence between RSI and price action to predict reversals.
Key Insight: “Momentum precedes price,” and divergences often signal a shift in underlying momentum.
Why It Works: RSI divergence gives traders an early warning of potential reversals, helping them anticipate shifts before they occur.

Who He Is: A pioneer in technical analysis, Wyckoff developed a methodology for identifying accumulation and distribution phases by institutional traders.
Strategy: Wyckoff Method – Analyze market cycles to anticipate price movements.
Key Insight: The market is manipulated by the “Composite Man” (large players who accumulate and distribute assets).
Why It Works: By tracking institutional activity, traders can align themselves with the smart money, improving their odds of success.

Who He Is: One of the first traders to use computer-based trend-following systems, Seykota achieved legendary returns through disciplined risk management and trend trading.
Strategy: Fibonacci Retracement – Identify potential retracement levels within trends for precise entry and exit points.
Key Insight: “Markets often respect key retracement levels like 38.2%, 50%, and 61.8%.”
Why It Works: Fibonacci levels are widely followed, making them self-fulfilling indicators of support and resistance.

Who He Is: The “Oracle of Omaha” and CEO of Berkshire Hathaway, Buffett is one of the most successful investors in history, known for his long-term value approach.
Strategy: Value Investing – Identify undervalued companies with strong fundamentals and hold them for long-term appreciation.
Key Insight: “Price is what you pay; value is what you get.”
Why It Works: By buying quality businesses at discounted prices, value investors can profit as the market corrects its valuation over time.

Who He Is: The billionaire macro trader who famously shorted the British pound during Black Wednesday in 1992, earning $1 billion in a single trade.
Strategy: Macro Trading – Trade based on global economic trends, focusing on currencies, commodities, and interest rates.
Key Insight: “Markets are often wrong; the key is knowing when and how to exploit it.”
Why It Works: By understanding macroeconomic forces, traders can position themselves for large moves driven by shifts in policy, growth, or inflation.

Who He Is: A pioneer in global investing, Templeton became a billionaire by buying undervalued stocks worldwide during times of extreme pessimism.
Strategy: Contrarian Investing – Buy when markets are fearful and sell when they are euphoric.
Key Insight: “Invest at the point of maximum pessimism.”
Why It Works: Contrarian investing exploits emotional extremes in markets, buying undervalued assets at their lowest and selling overvalued ones at their peak.

Who He Is: The manager of the Fidelity Magellan Fund, Lynch achieved 29% annual returns over 13 years, making it the best-performing mutual fund of its time.
Strategy: Earnings Growth – Focus on companies with rapid earnings growth and invest in industries you understand.
Key Insight: “Invest in what you know.”
Why It Works: Investing in familiar businesses with strong earnings growth reduces risk and increases confidence in decision-making.

Who He Is: Founder of Tudor Investment Corporation, Jones is a master of risk management and famously predicted and profited from the 1987 Black Monday crash.
Strategy: Arbitrage Trading – Exploit price inefficiencies in related instruments, such as futures, options, or currencies.
Key Insight: “The most important rule of trading is to play great defense, not great offense.”
Why It Works: By capitalizing on arbitrage opportunities and tightly managing risk, this strategy ensures consistent, low-risk profits.