With the downward trend line, the market has a clear divide between bulls and bears. Below the downward trend line is the bear camp, and above the downward trend line is the bull camp. When the market rises to the vicinity of the downward trend line at the arrow position, the downward trend line exerts a suppressive effect on the market. Each time the market rises near the downward trend line, it presents an opportunity for investors to short. As long as the market cannot break through this downward trend line, we will primarily focus on shorting; when the market effectively breaks through this downward trend line, its role changes from suppression to support, and we can use this breakthrough as a basis to go long.
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After hitting the bottom, the market begins to rise, with the lows being continuously raised. By connecting two low points with a line, we obtain the ascending trend line we desire. As the market continues to rise, as long as the pullbacks during the rise find support near this trend line, we can use this trend line as a basis to go long. The direction of the trend line indicates the direction of our trades; if the upward trend line is trending upwards, we will primarily focus on going long; if the downward trend line is trending downwards, we will primarily focus on going short. Strictly adhering to this trading principle can generally lead to trend-following trades.