To trade and avoid losses or liquidation, there is one discipline to strictly adhere to: do not short in an uptrend and do not go long in a downtrend; if you want to profit, do the opposite, that is, seek the direction of least resistance, which is also Livermore's viewpoint.

Key questions arise:

1. How to accurately define an uptrend and a downtrend? (The definition of trends must be clear)

2. How to determine what level of trend is currently in place? (Quarterly, monthly, weekly, daily, hourly, etc.)

3. What are the trends in larger or smaller levels? (Follow the trend of the larger level, reference the smaller level)

4. How to determine the level of the main battlefield for trading based on personal characteristics?

5. How to judge when a trend at this level ends and a new trend begins? (There should be clear level turning signals)

6. When to decisively enter a trade? (Must have sufficient technical characteristics, such as wave structure, candlestick combinations, probability statistics)

7. What techniques are there during the position-holding process? (Are there reference patterns to enhance confidence?)

8. How to take profits? (Have reversal signals appeared at the same level? Has passive defense been triggered? Has the target been achieved?)

With these analytical skills, the trading system begins to take shape. However, the difficulty lies in the huge gap between cognition and execution. People often fall into greed, anger, ignorance, slowness, and doubt, the root of which lies in cognitive bias, not truly mastering knowledge, making it difficult to implement, and insufficient mental training. However, if one stubbornly adheres to the wrong path, the outcome often ends in liquidation and total loss.