1. Brief introduction
PA trading is conducted through naked K (of course you can also use indicators to assist you, the market is the only criterion for testing whether the trading system is successful). We analyze the current market conditions and plan our transactions through the trend of K-line and the structure of the market.
2. Market structure
There are three stages in the market: rising, falling, and sideways. Let's first make a simple definition of the trend. The rising trend is Higher high and Higher low. The falling trend is Lower low and Lower low. (For a simple strategy based on this definition, please see: https://twitter.com/Oxyge111/status/1680139969506185216?s=20) All the following sharing is based on this.
3. Find support and resistance
Support is divided into the following situations (opposite to resistance):
1. The Yin line before the Yang line (including the lower shadow line and the upper shadow line depending on the situation) (see Figure 1 for details)
2. The last swing high and low of the previous small-level downward trend under the large-level upward trend. (See Figures 2 and 3 for details)
3. Interchangeable supports and resistors (see Figure 4 for details) But I don’t like this and generally don’t use it. I will only consider using it if 1 or 2 cannot be found.
4. How to apply support
Support and resistance are used to find entry points. For example, look for small-level structures at large-level support and resistance positions, and then enter the market at small-level support and resistance positions to increase the winning rate and profit-loss ratio. Every trader has a different opinion on how to set a stop loss. If I enter the market based on the left side of support and resistance, then I will place the market stop loss at the upper and lower edges of the support and resistance. As long as the price reaches this place, I will stop loss and exit directly.
