For high-leverage short-term contract traders like myself, the essence of trading can be summarized as: setting limit stop-loss orders at key points for precise speculation. In our trading dictionary, there are no absolute expressions like 'it will definitely rise' or 'it will inevitably fall,' because market trends cannot be precisely predicted. All technical analysis is essentially based on probabilistic laws summarized from past market movements. Therefore, the essence of trading lies in how to accurately identify key positions in the market and how to set reasonable stop-loss limits to conduct risk-controlled speculation.
I tend to underestimate indicators and place more importance on candlestick patterns. I believe that all technical indicators are derived from price movements, and the current price reflects the capital dynamics and emotions of all market participants, as well as the comprehensive results of all indicators' predictions. Therefore, my core basis for judging key points is candlestick patterns.
In candlestick patterns, key points are relatively intuitive and usually include the following four elements: the high and low points of the range after a one-sided market, the upper and lower edges of trend lines, and the necklines in pattern combinations. These four elements form the underlying logic of classic candlestick patterns. Only by deeply understanding and mastering these four key elements can we achieve a state of ease in analyzing candlestick patterns, thereby orchestrating strategies in short-term trading and seizing opportunities.