The market trend is nothing but 'upward, downward, consolidation', and its combination patterns can be summarized as trap type (upward + downward, downward + upward), reversal type (upward + consolidation + downward, downward + consolidation + upward), and continuation type (upward + consolidation + upward, downward + consolidation + downward).
In spot trading, the most effective operating model for retail investors is: downward + upward. There are two types of connecting trends before this model: upward or consolidation.
It can be deduced that if the pattern is 'upward + downward + upward', it belongs to a higher-level consolidation, which will not be considered temporarily. Not considering it does not mean it cannot be profitable; it is simply finding the simplest method in a complex pattern. After this exclusion, the only connecting trend that meets the conditions is consolidation, i.e., the pattern changes to: consolidation + downward + upward (the downward movement must break below the previous consolidation; otherwise, it still belongs to consolidation).
There are also two types of trends before the consolidation phase: upward or downward. Therefore, 'consolidation + downward + upward' can be subdivided into two types:
1. Upward + consolidation + downward + upward;
2. Downward + consolidation + downward + upward.
Among them, type 1 (upward + consolidation + downward) essentially constitutes a higher-level consolidation, which is also temporarily not considered. Ultimately, only type 2 remains, where the trend is 'downward + consolidation + downward', which meets the operating conditions.
In summary, establish standard operating procedures:
One, only choose varieties with 'downward + consolidation + downward';
Two, intervene when the first type of buying point appears in the second segment of downward trend;
Three, once a consolidation trend appears after intervention, exit immediately.
This article is only for academic exchange from the perspective of Chan theory; do not use it as an operational basis; the market has risks, and decisions must be independently judged.