Core Rules of Short-term Trading
Core Rules of Short-term Trading: Response Logic from Consolidation to Trend Change
1. Observation Method for Trend Change during Consolidation #Public Account Block Outpost
During high-level consolidation, be wary of the main force using 'false breakouts' to lure in more buyers; during low-level consolidation, be cautious of sharp declines after emotional lows. Key principle: Before the direction of the trend change is clear, maintain light positions and wait; patience is more important than action.
2. Risk Warning during Consolidation
Data shows that during the consolidation phase, due to unclear volatility and difficulty setting stop-losses, irrational trading can occur, leading to an increased probability of losses. At this time, reduce frequent trades and focus on opportunities after the trend becomes clear.
3. Contrarian Thinking with Yin and Yang Lines
When a large bearish line appears at a key support level and volume decreases, watch for rebound opportunities (not blindly bottom-fishing); a large bullish line accompanied by increased volume and stagnation requires caution for pullback risks; contrarian thinking should be combined with trend judgment.
4. Relationship between Sharp Declines and Rebounds
During a sharp decline, if key support is not broken and panic emotions are fully released, short-term rebound momentum may be stronger; a gradual decline accompanied by continuous shrinking volume often limits rebound strength. Comprehensive judgment should be based on the extent of the decline, position, and volume.
5. Pyramid Positioning Strategy
In the bottom area (should be combined with valuation and trend confirmation), a staggered entry strategy can be adopted: for each certain percentage drop (e.g., 10%), the proportion of additional positions decreases (rather than being fixed at a certain percentage), to avoid being fully invested too early and reduce cost volatility risk.
6. Position Management before Trend Change
After a sharp rise enters consolidation, it is recommended to first recover the principal, leaving some positions to track the trend, securing profits to control risk; after a sharp decline and consolidation, if the trend has not reversed, decisive stop-loss or reduction in positions is necessary to avoid deep losses; the speed of stop-loss depends on discipline.
Investment carries risks, and strategies should be adjusted according to one's own risk tolerance and actual market conditions; rational allocation is essential for long-term steady profits.
