The difficulty of trading, consolidation and fluctuations, to gain it is to gain the world.
The function of 10 completely classified categories is to deal with consolidation!
Summarize and classify all possibilities, there are only a few directions for price fluctuations, just wait and see.
Wait for the price to develop freely and see which category it chooses. After it happens, several possibilities become a certain event, and you can respond according to the established guidelines, this is the essence of trading.
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Trends are dynamic, and humans can only observe trends using dynamic evaluation criteria (reference points). Therefore, what we need is a reference point, which must be a dynamic reference point because trends are dynamic; we cannot act like carving a boat to seek a sword. Moving averages are dynamic and are a solid basis for dividing trend levels as prices fluctuate.
Highs and lows are also dynamic. We do not care about what happens between the highs and lows; we only care about the arrangement relationship of the highs and lows.
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After an upward movement is completed, it may be followed by a downward movement or consolidation, but it cannot be another upward movement. If it is an upward movement, then it contradicts the completion of the upward movement, indicating that the upward movement has not been completed.
Similarly, after consolidation, there must be an upward or downward movement. After a downward movement, there must be an upward movement or consolidation.
Taking the upward movement as an example, if a pullback breaks the previous low, then two possibilities begin.
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One is a direct reversal.
The second is entering consolidation. What happens after consolidation? We won't know until it comes out, but this does not affect operations; you only need to define how consolidation ends. Generally, when a wave of fluctuations breaks out of the consolidation range and the pullback does not break this range, it can be confirmed that the consolidation has ended. This is fairly certain, but no one can guarantee 100%. In other words, losses are allowed to occur in low-probability events.
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