Article Disclaimer: All content is derived from the original Chan Theory, mixed with my own insights. To grasp the most original insights, one must contemplate the original text. This weekend, I will begin syncing real-time trading with notes.
Summary of Previous Knowledge Points
Moving Average System
Sunrise: The short-term moving average slightly flattens before continuing along the original trend.
Moonrise: The short-term moving average approaches the long-term moving average but does not break below or rise above, then continues according to the original trend.
(tps: Often a sign that the rebound is ending)
Sun and Moon Alternating: The short-term moving average breaks below or above the long-term moving average, even leading to repeated entanglement, like glue.
(tps: Trigger point for market turning points)
Two Situations of Market Turning Points:
First, "Sun and Moon Alternating," then following the original trend leads to a big climax, creating a trap before the turning point.
Repeatedly "Sun and Moon Alternating" constructs a turning box pattern, where the subsequent climax indicates a change in the "Heavenly Position."
Results Produced by Entanglement
Continuation
Turning Point
Bullish Buying Opportunity:
"Bright Moon High Hanging" Turning Point
"Great Sun in the Sky" Continuation
Bullish Trading Points
First Type Buying Point: A bearish trap formed after the last entanglement of "Bright Moon High Hanging" for bottom fishing. (tps: If the entanglement of "Bright Moon High Hanging" appears during an uptrend, one must exit)
Second Type Buying Point: The first entanglement formed after "Great Sun in the Sky" at a low point. (tps: If the previous lowest point of "Bright Moon High Hanging" is broken during entanglement, one must act during any rebound)
First Type Selling Point: Appears after the entanglement of "Great Sun in the Sky" showing divergence.
Second Type Selling Point: The first entanglement high point that turns into "Bright Moon High Hanging".
(tps: It's generally best to buy at the second type of buying point and sell at the first type of selling point)
Chan's Theory on the Zen of Trading Buying Point Law
The second type of buying point at a large level is composed of the first type of buying point corresponding to the trend at the next lower level.
Chan's Theory on Short Trades
When a buying point at a large level occurs, if the first type of selling point at the secondary level appears, one can first reduce positions, and then replenish when the first type of buying point at the secondary level appears. (tps: Can increase capital utilization rate)
