The most important thing in trading is to follow the trend

Under the mindset of trend analysis, trends incorporate all information, including logic and fundamentals. When logic and price movements resonate, it is the best time to trade. A trend without logical support cannot go far. A trend that has not broken out of its logical foundation is merely wishful thinking.

A healthy trend does not rise every day but moves in a pattern of two steps forward and one step back, oscillating upward. If the trend becomes a daily large bullish candle, it indicates a climax and a sign of a top.

Based on the fact of “two steps forward, one step back,” in a trend, it is entirely possible to break the trend into segments for trading. Buy low during the “retreat” phase and sell high during the “advance” phase. This way, you participate in the trend while avoiding large retracements.

Since trends can be segmented into waves, range oscillations can also be divided into waves (because the market is in oscillation 70% of the time, with clear trends being very rare). Buy low at the bottom of the range and sell high at the top.

As for a downtrend, it must be absolutely avoided. Under the wave trading mindset, the most important thing is the change in supply and demand reflected in the volume-price relationship.

First, identify the market background. Different backgrounds require different strategies. A strong background indicates a persistent trend, mainly holding positions; a weak background suggests high selling and low buying.

Second, identify whether the market is in an uptrend, range oscillation, or downtrend.

Third, identify the strongest logic, as logic is the foundation of the trend; the trend is the result of logic.

Fourth, identify the supply and demand pattern, recognizing positions where the probability of decline is low and the probability of rise is high.

In terms of operation, be good at waiting for signals to appear and trade purely based on signals with a clear mind.

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