In a downtrend, prices typically follow this pattern: Lower highs → Support levels repeatedly breached → Narrowing trading range → Accelerated decline. Each lower high confirms renewed selling pressure. Each break below support confirms the continuation of the trend. When a long lower shadow appears for the first time after an accelerated decline, it often indicates weakening selling momentum and the emergence of bargain hunters. However, this does not necessarily signify a reversal; it only suggests a possible slowdown in the pace. To determine if a trend has ended, the key is whether the price can regain the highs and lows of the previous wave. As long as the structure is not broken, the trend remains valid. In other words, use price action to indicate the trend direction, rather than as a percentage of price movement.

Support held → Candlestick confirmation → Trend continuation. After a price breakout above key resistance, the real test isn't the breakout itself, but the subsequent pullback. If the price pulls back to the previous high, holds support, and forms a significant lower shadow, the market is confirming the structure. Once confirmed, the probability of the trend continuing increases significantly. Therefore, when discussing the "shadow" signal, the focus isn't on the shadow itself, but on whether it appears on a key structure. Only when the structure and pattern resonate is a trade worth taking.

Bitcoin has triggered a daily breakout warning signal again. From a price perspective, it remains within a large-scale consolidation range. Looking back at previous similar signals, while the price reacted, the fluctuations were mostly between 2% and 4%, representing fast-paced, small-range localized waves. Based on this structural background and historical reactions, I tend to believe that this signal is also more likely to bring about a fast-paced, short-term fluctuation, but it will not change the main structure of the daily trend.

Support and resistance are not simply two lines drawn on a chart. They are the collective consensus formed by the market over time, psychological anchors (and market consensus) after short-term clashes between bulls and bears. A support zone is the buyer's bottom line. Multiple touches without a break indicate active defense by bulls, and the market recognizes this as a reasonable low range. However, once effectively broken, this zone transforms from a "defense line" into a "resistance zone," triggering stop-loss orders and short selling simultaneously, leading to a market reversal. A resistance zone is the seller's ceiling. Multiple failed attempts to break through represent continued bearish pressure. However, once broken, it indicates that supply has been absorbed, bulls have gained control, and the original resistance transforms into new support. Therefore, the key is not where the "lines" are drawn, but whether price behavior within these zones indicates a shift in power. When you see prices forming higher lows in support zones (important), or lower highs in resistance zones (important), it is often a signal of a trend reversal.

Extensive reading is actually the most easily overlooked aspect of trading. The breadth of your reading determines whether you can reinterpret market fluctuations using dimensions such as macroeconomics, institutional dynamics, human nature, and history. The depth of your reading determines whether you are led by information or can make independent judgments based on underlying logic. The multi-layered and multi-dimensional understanding you develop will ultimately manifest on the charts, becoming your way of reacting to market fluctuations.

Major trading opportunities (trend reversals, extreme misalignments, major breakouts) rely heavily on favorable timing and circumstances, and are largely driven by luck. Minor trading opportunities (structural pullbacks, continuation of momentum, short-term fluctuations) depend more on observation, execution, and preparation; they are achievable through effort. Ordinary traders can accumulate small wins into large victories, and just as easily change their fortunes.

The essence of pattern trading is never prediction, but confirmation. All strategies begin with the premise that the market has already made its stance clear, entering with the trend rather than trying to guess tops and bottoms. I. Breakout Strategy: New Structure Emerges When the price breaks through the previous high or falls below support, it signifies a disruption of the existing balance and a clear shift in direction. Whether going long or short, the essence is trading the "completion of the shift in bullish and bearish forces." These signals are usually accompanied by increased volume, acceleration, and strong market sentiment (it's too late to get on board now, or it's the last chance to escape 😂). II. Reversal Strategy: From One-Sided to Two-Sided Trend If the price moves in a one-sided direction, it indicates that the market is still being pushed. However, if it starts to change, with highs failing to break through and lows failing to rise, coupled with frequent suppression at key levels, it's basically confirmed that the market momentum is waning. This structural stagnation marks the end of the "foolish market": the market no longer rewards simple trend following, forcing shorter holding periods and increasing the difficulty of trading. At this point, continuing to rely on trend-following thinking will lead to frequent losses, while the real trading advantage shifts to the ability to anticipate structural shifts and switch rhythms. III. Pullback Strategy: Reconfirmation After a Trend Establishment After a strong breakout, prices often pull back to the old structural levels. This is a structural pullback in the market, testing the stability of the trend and providing a low-risk re-entry opportunity for those who missed the initial move. The key is to judge the "strength" and "rhythm" of the pullback, rather than blindly buying on every pullback. *The breakout pullback test is the most suitable strategy for trading beginners. IV. Moving Average Strategy: Resonance Signals of Time Structures When a short-term moving average crosses above a long-term moving average (e.g., EMA50 crosses above EMA200), it represents multi-timeframe resonance, indicating continued trend strength; conversely, the opposite is also true. Moving averages do not predict signals; they only verify that a trend already exists (an objective standard). They are slow, but they filter out much of the noise from abnormal price fluctuations. The maturity of trading lies not in whether you are bullish or bearish or in improving your so-called accuracy, but in your ability to identify price structures that suit your trading style and, based on existing facts, execute a repeatable reaction logic.

The underlying logic of moving average strategies is the resonance across time dimensions. When the price is above all moving averages, it signifies that short-, medium-, and long-term market consensus is accumulating momentum in the same direction. When the short-term moving average (EMA50) crosses above the medium- and long-term moving averages, it indicates that buying pressure is beginning to take the lead in shorter timeframes. When the medium-term moving average (EMA150) is above the long-term moving average (EMA200), it indicates that the trend has been structurally confirmed. And when the EMA200 itself begins to turn upwards, this is not a short-term rebound, but the mature start of a new trend. When the price consistently trades above all moving averages, any pullback, as long as it doesn't break below key medium- and long-term moving averages, should not be considered a topping signal, but rather a "normal adjustment" within the trend.

My former boss once said: A trader should be able to tell at a glance whether a stock is worth trading. If you can't make a judgment after 30 seconds, there are usually only two reasons: 1. Your fundamentals are lacking; you don't understand it, you're too inexperienced. 2. The market structure is indeed unsuitable, so just skip it. Ultimately, stock selection isn't about analysis, but about identifying "whether it has trading value." Go for it if it's worthwhile, discard the uncertain ones as quickly as possible.

Planning, strengths, discipline, consistency, risk control, and emotions—these six dimensions determine whether you can grow from a "trader who acts on impulse" to a "mechanically executing profitable trader." Of these six dimensions, emotional management is the most misunderstood by traders. Most novice traders believe they have "emotional problems," but in reality, they simply haven't undergone systematic training. Those seemingly emotional outbursts, such as chasing highs, prematurely taking profits, and being afraid to add to positions, often stem from unclear planning, insufficient understanding, and a lack of risk control. Without a clear entry criterion, you'll naturally hesitate repeatedly during an uptrend; without psychological expectations for profit and loss drawdowns, you'll naturally panic when profits are given back; without understanding the boundaries of your trading system, you won't be able to calmly hold positions when making big profits. Mature traders aren't without emotions (absolutely not), but they never rely on "improvisation" or "a flash of inspiration," but rather mechanically execute their trading plans. Therefore, the key to emotional management is not to suppress one's nature or shout emotional slogans to embolden oneself, but to repeatedly refine the trading system so that every decision is self-consistent.