What type of ARIMA trading strategy involves using a one-day forecast?

A one-day forecast using an ARIMA (Autoregressive Integrated Moving Average) model is most appropriately aligned with a trend-following strategy. This approach revolves around capturing and capitalizing on existing market trends over a short-term horizon, such as one day.

In a trend-following context, traders will utilize the ARIMA model to predict future price movements based on past data, allowing them to make buy or sell decisions that align with the prevailing direction of the market trend. This strategy assumes that prices that have been trending will continue to do so, at least in the short term, making a one-day forecast particularly effective for capturing quick profits.

The other concepts mentioned, such as mean-reverting indicators and high/low confidence bands, focus on different market behaviors, such as expecting price movements to revert to a mean or assessing price stability within upper and lower bounds. Slope approximation could relate to identifying the rate of change in price, but it doesn't specifically align with leveraging forecasts for trend-based trades. Thus, the trend-following strategy using a one-day forecast utilizes the predictive capabilities of ARIMA models to effectively respond to immediate market movements.