Today, let's talk about the second buy in Chan's theory. In the Chan theory system, the second type of buying point is defined as "the first bearish rebound after the first type of buying point that does not create a new low." This position is higher compared to the first type of buying point but possesses a more stable margin of safety. After a suspected first buy, if one heavily intervenes at the secondary level of the second buy position, one may encounter the dilemma of the central area extending to create new lows. This typical confusion reflects the deviation in understanding of most learners regarding the second buy—equating theoretical certainty with practical inevitability.

Master Chan explicitly pointed out in the original text: "The essence of the second type of buying point is the market's confirmation process of the first type of buying point." This confirmation process contains a self-validation mechanism of price movements. After the first type of buying point appears, the secondary trend will form an upward push, followed by an inevitable secondary pullback. If this pullback does not break the previous low, it serves as the confirmation signal given by the market. From a dynamic perspective, this process has completed the exhaustion test of the bearish force, just like the height of the first rebound after a spring is compressed, which often reflects the real comparison of bullish and bearish forces.

In actual operations, the form evolution of the second buy presents rich possibilities. The strongest second buys will overlap with the third type of buying points, forming an explosive point of V-shaped reversal; while the weakest second buys may fall below the first buy position, evolving into the trap of central extension. The root of this phenomenon lies in the expectation differences among market participants—when most people believe the first buy has been established, the main funds may use this consensus to create false breakthroughs.

The controversy over the second buy online centers around the "certainty trap" and the "multiple second buys" phenomenon. Some viewpoints argue that it's a fallacy to state that a second buy will inevitably create new highs; in actual trends, some second buys may evolve into central oscillations. This cognitive difference stems from a misinterpretation of the concept of "levels." The emphasis on "the trend must be perfect" in Chan theory is based on strict level differentiation. When investors confuse the daily second buy with the 30-minute second buy, operational errors naturally occur. The key to solving this problem lies in establishing a multi-level interconnected observation system, such as using weekly second buys to confirm daily trends and then using 30-minute second buys to find precise entry points.

From the perspective of the operational system, the second buy is essentially a strategy for optimizing risk-reward ratios. Compared to the left-side trading attribute of the first buy, the second buy is closer to right-side trading; however, it is not entirely equivalent to the traditional technical analysis concept of breakout pullbacks. This particularity requires investors to possess the ability to adjust dynamically: when a second buy position shows a volume increase with a bullish engulfing pattern, one can appropriately increase the position; if a volume decrease and sideways movement occur, one needs to be wary of central extension risks.

From the perspective of capital management, second buy operations must form a closed loop with the position control system. Although the original text of Chan theory does not explicitly mention position management, the idea of "segmented operations" implicitly contains risk control logic. It is recommended to adopt a gradual strategy of "trial position-increase position": invest 30% of the position at the initial second buy position, and then add another 30% when the previous high is broken and retested, retaining 40% of funds to respond to central extensions. This step-by-step position building method can grasp trend opportunities while avoiding significant losses caused by a single erroneous judgment.

The complexity of the market determines that no buying point has absolute certainty. When systemic risks arise, any technical form can be broken. This requires investors to establish a sound stop-loss mechanism, such as setting the lowest point of the second buy as a mandatory stop-loss level or using a trailing stop to protect profits. At the same time, it is crucial to recognize that the effectiveness of the second buy is highly dependent on the overall market environment. Forcing a second buy in a one-sided bear market is akin to rowing upstream.

From the perspective of trading psychology, the second buy is essentially a concrete representation of human nature's game. That seemingly calm pullback position is, in fact, a psychological critical point for both bulls and bears. The second buy area often accompanies the most intense chip exchanges, and every K-line here is engraved with traces of greed and fear. This psychological game is particularly evident in the recovery trend following a sharp drop, with many stocks experiencing repeated breakdowns and false breakthroughs at their second buy positions.

Summarizing the core essence of the second buy operation can be categorized into three dimensions: strictly distinguishing trend levels in the spatial dimension, grasping the relationship between divergence segments and the central area in the temporal dimension, and observing changes in transaction volume and chip distribution in the energy dimension. When these three dimensions resonate, the success rate of the second buy will significantly improve. If it is a large cycle, such as a weekly second buy coupled with favorable releases, forming a dual resonance of technical and fundamental aspects, it can ultimately lead to a doubling market trend.

For investors interested in in-depth research of Chan theory, it is recommended to establish a "three-dimensional verification" system: first, use the MACD indicator to verify the divergence structure; secondly, observe the price channel pattern with the Bollinger Bands; finally, confirm the main cost area with the chip distribution chart. This method of integrating multiple indicators can effectively filter out over 70% of false signals. After adding the volume anomaly factor, the win rate of the second buy strategy significantly increases, and the maximum drawdown decreases.

In the Chan theory system, the second buy has never existed as an isolated buying point. It constitutes a "double insurance" for trend reversal with the first buy and forms a "relay baton" with the third buy for trend continuation. A truly mature investor understands how to build a dynamic balance among the three buying points: capturing turning opportunities with the first buy, expanding the results with the second buy, and chasing the main upward wave with the third buy. This three-dimensional operational thinking is precisely the essence of Chan theory that transcends traditional technical analysis.

Standing in the market environment of 2025, with the popularization of quantitative trading and the acceleration of algorithm iterations, the traditional second buy pattern is undergoing subtle changes. The recently observed "lightning second buy" phenomenon—where the pullback cycle is compressed to the minute level, yet the amplitude reaches the daily level—poses new challenges for manual traders. This requires us to keep pace with the times, learn to use scripts for auxiliary trading, and while adhering to the core principles of Chan theory, also learn to identify variants of the second buy in new market structures.

The second buy is merely an opportunity provided by the market; true profits come from the precise grasp of "after the buying point." Master Chan repeatedly emphasizes in the course: "The ability to hold after a buying point is the touchstone to test the caliber of a trader." This truth is vividly manifested in many cryptocurrencies, especially altcoins: those who accurately enter at the second buy position but take profits too early miss out on subsequent major upward trends; while traders who strictly adhere to the discipline of "not leaving the market unless the trend breaks" ultimately reap excess returns.

Finally, here is a trading model combining the second buy with the Bollinger Bands



Entry
1. The trend breaks through the upper or lower Bollinger Band
2. A second buy occurs in 30 minutes
3. A fractal occurs at this level

Exit
1. The trend breaks through the upper or lower Bollinger Band
2. A second buy occurs in 5 minutes
3. A fractal occurs at this level

Stop Loss
Three types of stop loss methods, as shown in the figure. The three stop losses are mainly chosen based on one's position. If the position is too large, directly stop loss at the second buy;
If position control allows, it can be relaxed to stop loss at the lower two or three positions to prevent the trend from breaking the second buy position and then pulling up directly, leading to frequent losses.
Directly stop loss at the second buy position of this level.
Internal calculation of resonance position stop loss.
Internal calculation of extreme resonance position stop loss.


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