Essentially, all indicators, technical analysis tools, and trading strategies are based on the principle of 'carving a boat to seek a sword.' Most people understand the market through 'inductive reasoning';
while professional traders use 'deductive reasoning';
The former looks for patterns and rules from the past, expecting that price behaviors that occurred in the past will appear again in the future.
The latter, on the other hand, makes causal deductions based on the current real-time situation.
Because there are a few large sell orders at a certain position, it is difficult for the price to break through that position, so one should short above these sell orders.
However, in reality, neither inductive nor deductive reasoning can perfectly solve problems; each has its own advantages and disadvantages.
The truly effective methodology is 'a high-frequency testing loop with self-correcting capability'!
Once a trading or analysis system is formed, it must continuously evolve and self-correct!
Only in this way can it align with the operational logic of the market, which is that everyone is constantly changing!
So it’s not that sometimes money is easy to make and sometimes it’s hard; rather, those who cannot keep up with market changes will always feel that making money is difficult, while those who change with the market always feel that making money is easy.
This paragraph needs to be savored carefully!
This is also the reason I have been trying to write dynamic indicators that can modify their parameters in real-time based on the latest data.