Based on the basic knowledge of wave theory discussed earlier, everyone understands that market trends follow certain patterns. This pattern is that the market completes a round of phase-based upward or downward movement, usually completed through 5 waves up or 5 waves down, which is often referred to as 3 upward movements or 3 downward movements. However, the market can also experience 5, 6, or even more upward or downward movements.

Talking with the chart: The 3rd and 5th waves in wave theory are generally in the middle of an upward trend.

After the initial upward phase, the market enters the mid-stage of the upward movement. According to wave theory, it is not difficult to find that the mid-stage of an upward trend is essentially the 3rd and 5th waves of wave theory.

Once an upward trend is formed, we can apply the trading principle of following the big trend and countering the small trend, entering long positions at the pullback points of the 2nd and 4th waves. Retail investors often find it difficult to catch the 1st wave at the beginning of the upward trend, but they can capture the upward movement of the 3rd wave and hold positions until the 5th wave, or even higher points. As long as the trend is not broken, in theory, it can be held indefinitely. $ETH $ cryptocurrency