Here, we will discuss how trading ideas are born and how they are turned into algorithmic trading strategies. Fundamentally, all trading ideas are driven by human intuition to a large extent. If markets have been moving up/down all the time, you might intuitively think that it will continue to move in the same direction, which is the fundamental idea behind trend-following strategies. Conversely, you might argue that if prices have moved up/down a lot, it is mispriced and likely to move in the opposite direction, which is the fundamental idea behind mean reversion strategies. Intuitively, you may also reason that instruments that are very similar to one another, or loosely dependent on one another, will move together, which is the idea behind correlation-based trading or pairs trading. Since every market participant has their own view of the market, the final market prices are a reflection of the majority of market participants. If your views are aligned with the majority of the market participants, then that particular strategy is profitable in that particular instance. Of course, no trading idea can be right all the time, and whether a strategy is profitable or not depends on how often the idea is correct versus how often it is not correct.