A8 trading expert shares several truths about trading! 1. The probability of a trend appearing is much lower than you imagine A single market, on average, can provide two rounds of trends throughout the year, which is very good. Most of them fluctuate for a small half year, the trend lasts for two or three months, and then fluctuates for another small half year. This means that the trend should be judged mainly on a daily and weekly basis, and the position should be determined from a large cycle, with downward filtering in the same direction and compatibility; Instead of testing positions in small cycles and betting on short-term unilateral expansion into large cycles. Many people say it's about following trends, but in reality, it's not the logic of following on the right side of a large cycle. Instead, it's about betting on resistance suppression on the left side of a small cycle, trying to buy the bottom and guess the top, and engaging in short-term high and low trading that goes against the trend. 2. It is easy to distinguish between a trend and a trend: Following the trend will benefit from a unilateral breakthrough, as the essence of trend trading is to follow the momentum effect of the market, known as following on the right side, while a reverse trend will suffer in a unilateral breakthrough, as the essence of a reverse trend is to bet on the kinetic energy of the trend turning point, known as betting on the left side, Both of these types can make money within a certain range if done well, only when their core logic is unclear will major problems arise, that is, using A's philosophy to package B's operations, using a handgun to fight tanks, just hoping for a market explosion. For example, many people engage in daily and weekly trend trading, but their entry signals are compressed to hourly level consolidation breakthroughs. You think you have a reason to trade, but from a macro perspective, the major trend is not yet clear, and the Double Ninth Festival has not yet broken through and stabilized. You have already entered the small level early (wanting to take advantage of the position in advance) Similarly, there are many people who cannot understand that trend trading is a stance, a decision-making discipline of only being long and not short during a certain period of time, or only being short and not long. This disciplinary principle should override any technical trend. You can't judge that a "depleted" or "obstructed" trend is doomed based on local trend performance, such as 15 minutes or 1 hour of encountering obstacles. The truth is relative. How do you know that a depleted consolidation cannot be restarted, and an upward breakthrough cannot be made after encountering obstacles? 3. The emergence of trends is essentially an imbalance between supply and demand, driven by certain factors such as focal events, market expectations, and structural imbalances Focus events are crisis events that can have a huge impact on the market, with three characteristics: 1. May have a huge impact on market liquidity The development of two events has high uncertainty 3 can affect the economic landscape, and major countries will make key decisions based on this event The emergence of a key event will fundamentally change the market state, shifting from a technical market to a news market. The reliability of any graphics, indicators, or theories you used in the past will seriously decline, and the development of trends will be completely dominated by the latest relevant and sudden news. Without news, there will be a sideways correction, and with news, there will be a sharp rise and fall, with one wave in place (you can review the trends of Russia, Ukraine, and crude oil at the beginning of the year) Market expectations refer to changes in supply and demand or the introduction of certain long-term policies, which lead to a clear tendency in the market towards future price expectations For example, when the Federal Reserve starts its interest rate hike cycle, although the local trend is unpredictable, the overall trend has a clear tendency. From another perspective, most trend changes require the cooperation of fundamentals, and the evolution of trends often cannot be separated from the assistance of these core factors. A market with clear technical logic may not be dominated by technology, but by fundamentals and clear expectations. (Reviewing Gold) In simple terms, fundamental changes are internal factors that lead to increased market volatility, while the probability of forming a medium to long term trend greatly increases due to active market conditions; Unfortunately, many people only look at the surface and do not care about the core. They focus too much on entry signals and do not attach importance to analyzing market conditions. Structural imbalance, imbalance of long and short market patterns, emergence of strong and weak differences, and clear directional trends in market operation guide market participants to form a consensus and synergy, which is commonly referred to as the technical market. So the emergence of trends benefits from these three driving forces, and prices are actually the terminal of the "transmission chain". Regardless of the factors, after releasing their influence, they must be presented as results on the chart. Therefore, trend trading is essentially confirming the existence of the "transmission chain" and betting that it has not yet expired. Charts are objective, but they are traces left by fluctuations, just like the sun drying water droplets and leaving imprints on the ground; You can deduce from existing clues and bet on the possibility of trend continuation by observing momentum. But you can't just rely on some local coincidences and fantasize about finding the holy grail of predicting the top and bottom of trends. After all, as I said, the trend you see with the naked eye is just a stereotype of price trends, and your understanding of the essence of sports is very lacking. Therefore, only by analyzing and confirming the state of the market, and then adopting appropriate trading methods, can you achieve ideal results, rather than having a simple technique that can be effective in the long run, after all, the market is not a static and isolated object. 4. Developing trading strategies requires logical processes and consideration of operational difficulty Encountering obstacles - obstructed - breaking obstacles, It is a continuous change in trend that occurs during a certain period of time, just like a seed, sprouting, growing, and bearing fruit; You can't just draw one of the 'profiles' and make a final decision. It encountered obstacles twice, and the third time it must reverse? As long as it is blocked, it will definitely turn downwards? No, encountering obstacles is just a neutral state, representing a short-term decline in the trend, and it itself has no attributes or tendencies. Compared to clear "breakthroughs" and "reversals", the formation of small-scale oscillations after encountering obstacles is the most likely short-term event. And then, this makes many traders who are accustomed to being either black or white uncomfortable. Their original idea of "I can try short first when encountering obstacles, and then turn long after losing short" was good, but they did not consider reality. To test short, you need to place a stop loss. Stop loss requires space, and when you hit the stop loss, there is enough volatility on one side. However, if you really stop the loss, you may want to chase a few more levels and run far. At this point, there is no choice but to prepare for a retracement to confirm the backhand opening more, hoping to recoup the loss. However, the strong trend has few retracements, and there are not so many opportunities for smooth and strong acceleration? Only weak trends will hesitate, and in the end, they will enter the market and catch up with a false reversal. This is a typical case of "sticking out the head, shrinking the head or not" and "one foot, one hole, not pulling the hole" So the formulation of strategies needs to start from reality. When you make trends, you are betting on the market momentum effect, and there are no more than two intervention methods: 1. Pursuing timeliness, entering the market as soon as the trend is established, maintaining short positions before, and responding targetedly 2. Make short-term returns, let the market make a move, wait for the end of the unilateral wave, and then intervene with a pullback It is necessary to make choices with emphasis in order to grasp specific trend patterns in a targeted manner. If there is an opportunity, do it; if not, wait; The Wall Riders may seem to be able to "flexibly respond", but in reality, humans are not machines. After cutting losses, their self-efficacy decreases (confidence decreases, conservative hesitation), which is likely to be a result of playing both sides off.