SMC Smart Money Trading Strategy|Identifying Institutional Capital Trends
Do you want to trade like professional institutions? The core of the SMC (Smart Money Concept) strategy lies in identifying the footprints of "smart money" by capturing high-probability opportunities through changes in market structure
1. Order Block Trading Strategy • Concept: An order block is an area where large institutional orders are concentrated, typically appearing during consolidation phases before significant volatility • Bullish Entry: In a downtrend, if a bullish candlestick appears followed by a price reversal upward, the area is considered a bullish order block. Buy when the price retraces to this area. • Stop Loss Placement: Set the stop loss below the low point of the order block.
2. Break of Structure Strategy (BOS) • Concept: When the price breaks through key highs or lows of the original trend, it indicates that the trend may continue. • Operation: In an uptrend, after the price breaks the previous high (BOS), wait for a pullback to the demand area to buy. • Bearish Application: After the price breaks the previous low, sell when it retraces to the supply area, and set the stop loss above the signal candlestick's high.
3. Equilibrium Reversal Strategy • Concept: After market fluctuations, prices often retrace to supply and demand equilibrium areas, such as the 50% or 61.8% Fibonacci retracement levels. • Discount and Premium: Below 50% is the discount area, look for bullish opportunities; above 50% is the premium area, look for bearish opportunities. • Entry: When the price retraces to the equilibrium area (red/green line area), enter based on the signal.
4. Trend Reversal Strategy (CHOCH) • Signal Identification: When the price forms higher lows (HL) in a downtrend and breaks the previous high, forming a CHOCH signal, indicating that the trend may reverse. • Bullish Entry: After the price breaks the previous high, buy when it retraces to the order block or demand area, targeting the next liquidity area. • Stop Loss Placement: Set below the low point of the signal candlestick.
The SMC strategy is not just about looking at charts, but also about understanding the liquidity operations behind the market. The above is a personal opinion shared and does not constitute investment advice; friends are advised to evaluate cautiously.
Looking solely at price trends can easily lead to traps.
Trading volume, representing real money, can help you discern the intentions of major players.
Eight Key Volume Patterns: Uncovering the Footprints of Major Players Trading volume reflects the market's trading activity and the degree of capital involvement.
• **Extremely High Volume (Distribution Signal/High-Level Risk)** Trading volume reaches an extremely high level for the current phase. If extremely high volume occurs at a high level while prices stagnate, it often indicates major players are distributing their holdings, requiring a prompt exit.
• **Extremely Low Volume (Sluggish Signal/Phase-Level Bottom)** Trading volume shrinks to its limit, with extremely low turnover. Extremely low volume after a prolonged price decline indicates exhausted selling pressure and is a potential bottom signal.
• **Double Volume (Breakthrough Signal/Change of Status)** Trading volume more than doubles that of the previous trading day. Double volume at a low level often signals capital inflow and may initiate a rally.
• **Expanding Volume (Attack Signal/Increased Bullish Strength)** Trading volume increases for several consecutive days, showing a stepped upward trend. This indicates a continuous influx of buyers, and the upward trend is likely to continue.
• Contracting Volume (Warning Signal/Increased Bearish Force): Trading volume decreases for several consecutive days. Decreasing volume at high levels indicates exhausted buying pressure and insufficient momentum, potentially leading to a pullback.
• Half Volume (Washout Signal/Major Player Withdrawal): Trading volume is approximately half of the previous trading day's. Half volume after an uptrend usually indicates a short-term consolidation. If it occurs during a downtrend, it may indicate weakening selling pressure.
• Accumulated Volume (Washout Signal/Strong Breakout Opportunity): Trading volume increases continuously over a period of time, forming a dense volume spike. Accumulated volume at low levels usually indicates major players accumulating shares.
• Concave Volume (Bullish Strengthening Signal/Weakening Bearish Force): Trading volume forms a concave shape, "low in the middle, high on both sides." Concave volume during sideways movement indicates that selling pressure has been released. Buying pressure gradually returns, which can be seen as a buying opportunity.
The following summarizes the core logic of RSI and MACD in practical applications 1. RSI Indicator: Determines market strength and reversal signals RSI (Relative Strength Index) is an essential tool for mobile market observation It mainly measures market heat through the ratio of price fluctuations
• Bull-Bear Demarcation Line: RSI uses 50 as the midpoint Above 50 is considered a bullish market, where 50-80 is a strong buying zone Below 50 is viewed as a bearish market, with 20-50 representing a weaker market
• Overbought and Oversold Warnings: When RSI exceeds 80, it enters the overbought zone If it forms an M-top or head and shoulders pattern, it is a strong downward reversal signal When RSI falls below 20, it enters the oversold zone If accompanied by a W-bottom, it indicates a potential upward reversal
• RSI Trend Line Application: You can connect two or more peaks of the RSI indicator Draw an ascending or descending trend line When the price rises but RSI falls, it indicates that momentum is weakening
2. Indicator Divergence Quick Check: Uncovering the disguises at the end of trends Divergence means the price is moving in the opposite direction of the indicator It indicates that the current trend is losing momentum and is about to enter a correction or end
• Bearish Divergence (Top Divergence): Price reaches a new high, but the indicator (such as RSI or MACD) declines This indicates that bullish strength has reached a bottleneck, and the rise is nearing its end
• Bullish Divergence (Bottom Divergence): Price reaches a new low, but the indicator rises This represents a weakening of bearish pressure, nearing the end of the decline, and a bottom structure is forming
• Hidden Divergence and Exaggerated Divergence: These subtle divergence signals can help traders determine whether the trend will continue Or if a sharp directional switch is about to occur
3. MACD Strategy: Advanced judgment of crossovers and structures MACD determines short-term and long-term trend reversals through the interaction of DIF (fast line) and DEA (slow line)
• Golden Cross Strategy: DIF crosses above DEA If it occurs above the 0 axis, it indicates strong trends that are likely to rise again If it occurs below the 0 axis, it indicates that the market is starting to strengthen, making it likely to stop falling
• Death Cross Strategy: DIF crosses below DEA If above the 0 axis, it indicates a weakening trend, potentially leading to a significant drop If below the 0 axis, the trend further weakens, making continued declines likely
• Divergence Structure Confirmation: The more tops that diverge, and the occurrence of MACD death cross, the stronger the sell signal for the top structure The more bottom divergences, and the occurrence of MACD golden cross, the higher the confidence in buying #贵金属巨震
This set of tools is widely used in the financial markets Because it can reflect the support and resistance levels of market psychology
Prices often pause or accelerate near these levels It is an indispensable weapon for trend followers
1. Why use Retracement Used to identify when the 'correction wave' in the driving wave ends. When the price retraces to key levels such as 0.618, it is often the best time to return to the main trend direction 2. Expansion and Extension • Expansion: Determines the position where after the third wave runs, it may revert from the second wave back to the first wave area • Extension: Identifies the end point of external fluctuations, looking for points where the price reverses back to the previous wave trend
1. Common Tools and Selection In addition to the most commonly used Retracement and Expansion, there are also advanced tools such as channels, fan lines, arcs, and time intervals Choosing corresponding tools based on different market characteristics can make your predictions more accurate
2. Precise Strike Entry in 4 Steps Identify the distribution phase of the small cycle Wait for the price to test the supply zone Enter after breaking through the supply zone or ascending wedge Set the take-profit at the level of previous key low points
Learn this set of combination punches You will find your own compass amidst market fluctuations
The Truth About Support, Resistance, and Supply-Demand
Many people ask me, what exactly are support and resistance levels? If you only see it as a line, you will always be shaken out by false breakouts.
1. Redefining Support and Resistance Support: It's not that the price can't go down, but that buyers form a "demand zone" here. Resistance: It's not that the price can't go up, but that sellers form a "supply zone" here.
2. Why do these areas reverse? Because history repeats itself. When the price bounces multiple times at a certain level, it indicates market consensus on that price. This is not magic; it is the manifestation of collective psychology.
3. The Essence of Supply-Demand Relationships Structural areas do not require multiple tests. A strong one-sided movement can create a "foundational area." This is where the forces of buyers and sellers are severely imbalanced, and where smart money leaves footprints.
Novices look at price, while experts look at structure. If your chart only has candlesticks, it's like being in a forest without a compass.
1. The Dimension of Time Frames It is recommended to use 1H or higher time frames. The less noise, the clearer the structure. Low-magnitude fluctuations do not help your judgment at all.
2. The Meaning of Trend Channels An upward channel is not just two parallel lines. It is the boundary of market sentiment. When the price is moving within the channel, there is only one thing you need to do: follow the trend. Until the trend is broken.
3. Fibonacci is Not Mysticism Fibonacci predicts the market's "breathing." After a significant rise, there will be a pullback; after a significant drop, there will be a rebound. When the key levels of 0.5 or 0.618 coincide with trend lines, that is where you should focus on high-probability positions.
Final Confirmation of Trade Signals Morning Star, Three White Soldiers, Engulfing Patterns. These names sound nice, but without "convergence," they are worthless.
1. What is Technical Convergence? A single indicator is fragile. The signal is valid only when the following three conditions overlap: 1. Price is above the trend line. 2. Effective retest after breaking the resistance level. 3. Support at key Fibonacci retracement points.
2. The Real Role of Candlestick Patterns Candlesticks do not predict direction; they only confirm behavior. They tell you that at critical positions, buyers or sellers really exerted force. Candlesticks without a position are just random fluctuations.
3. Self-Review Before Entering the Market Do not rush just because you see a traffic light. You need to ask yourself: Is this in line with the trend? Do I have support protection?
Single K Line Pattern ≠ Entry Reason K line is just the result, not the cause
No position, no structure, no background No matter how beautiful the shape, it's just a pattern
Why are beginners most easily deceived by K lines? Because you only see 'this one', but do not see where it appears how long it has been moving who was exerting power in the previous segment
The same hammer line at the bottom, versus at a high position has completely different meanings
Divide K lines into 4 categories, only then can you use them
1. Neutral Candles (Doji, Spinning Top) Not an entry signal It's 'hesitation, balance, waiting for confirmation' Seeing a neutral line = do not act yet
2. Single Reversal Line (Hammer, Hanging Man, Shooting Star) Only indicates one thing: this one has resistance Whether it can reverse depends on whether there is 'confirmation' afterward
3. Multiple Combination Patterns (Engulfing, Morning Star, Three White Soldiers) More reliable than a single line But the premise is still: at the right position A combination without structure will still fail
4. Confirmation Patterns (Three Inside, Three Outside) These are the few patterns that can be 'considered' for entry But still need to be paired with: trend/key levels/volume
High win rate patterns, why are they ineffective for you? It’s not that the patterns are inaccurate, it’s that you are using them in the wrong order.
Wrong order: see the pattern → think of a reason → enter
Correct order: structure → position → behavior → K line comes last
3 Lifesaving Principles for Beginners 1. Do not enter based on a single K line 2. Patterns are only responsible for 'confirmation', not for 'prediction' 3. The more complex the name, the more dangerous it is for beginners
Many people think: Price drop = Cheaper = Should buy
But what the market really rewards, Is never 'bravery', But correct judgment
First understand: Four major buying opportunities Not every pullback is worth your reach
38.2% Strong momentum zone Strong trend, shallow pullback, suitable for following the trend
61.8% Golden value zone The core pullback zone where the market often acts
78.6% Institutional activity level Liquidity + structural confirmation, only then it makes sense
88.6% Stop-loss hunting level Not bottom fishing, but 'waiting for the market to make mistakes'
The key is never the numbers But whether this position has structure + behavioral alignment
Downtrend ≠ end of shorting
First clarify the downtrend patterns Downtrend Flag pattern followed by a drop Double top failure Bounce with no volume, no structure
These are not 'dropped too much' But rather 'hasn't dropped enough yet'
What is balance? What is imbalance?
The market only does two things: Balance (consolidation, accumulation, turnover) Imbalance (one-sided advancement)
Balance zone = Wait Imbalance zone = Move
What you need to do is not guess the direction, But wait for the moment when the market moves from balance to imbalance
6 types of 'bearish but most misleading pullbacks' 1. Strong pullback 2. Normal pullback 3. Liquidity sweep 4. Gap fill pullback 5. Double top pullback 6. Breakout block retest
All seem like opportunities But until confirmed, they are just guesses
The difference between two types of traders when prices drop
Trader A Sees a drop → Buys immediately Hopes 'it should bounce'
Trader B Sees a drop → Waits for reversal Confirms structure, strength, behavior Then enters at a better price
The difference is not in technique But in discipline and patience
Why does the market always rise for a while and then fall for a while? Actually, it's not random; it's rhythmic
The core structure has only one: 5 – 3 5-wave impulse: moves with the trend 3-wave correction (ABC): counter-trend pullback
The market does not rise in a straight line But moves in "emotional push × emotional correction"
How to view the impulse wave? Wave 1: Smart money starts to enter Wave 2: Pullback washes out traders (but does not break structure) Wave 3: The strongest, longest, and most volume Wave 4: Consolidation and correction, don't rush to chase Wave 5: Emotional climax, also the highest risk position
The truly profitable trades usually occur in Wave 3, The most dangerous often come from chasing high in Wave 5
What is the correction wave (ABC) doing? Wave A: The first drop at the end of the trend Wave B: Gives you the illusion that "it seems to be rising again" Wave C: Real emotional release and panic
This segment is not for you to chase It is for you to exit, rest, and replan
Fibonacci is not for guessing, but for alignment Waves 2 and 4 often retrace 38.2% / 61.8% Wave 3 often extends to 161.8% Wave 4 has shallow pullbacks and consolidates Wave 5 is prone to divergence
Retracement + resistance / support = trading area
A key reminder for traders Do not count waves rigidly Do not try to profit from every wave First see "is it currently an impulse or a correction" Then decide "should I enter, or should I wait"
Understanding waves Is not for predicting the future But to know whether you should take action now
Many people learn about triangles, only remembering "Buy when breaking up, sell when breaking down"
But what's truly useful is this sentence: A triangle doesn't predict direction—it compresses positions and waits for the main players to show their hand
1. Symmetrical Triangle | Direction undecided, wait for the "final cut" Highs are decreasing, lows are increasing Price range is narrowing Volatility and volume are gradually compressed
What are the main players doing? Washing out positions, changing hands, testing market patience Both bulls and bears are trapped inside
2. Ascending Triangle | Bullish control structure Highs remain flat (resistance fixed) Lows are progressively higher Buying pressure is increasing
Main player logic Selling pressure is fixed But buying support is getting stronger Time is on the bulls' side
3. Descending Triangle | Bearish dominance structure Lows remain flat (support fixed) Highs are progressively lower Reactions are getting weaker
Main player logic Someone is holding the support But sellers keep dumping from above Once broken, it drops quickly
4. Expanding Triangle | Emotional market, don't be a good boy Highs keep rising Lows keep falling Volatility keeps increasing
What kind of market is this? Emotional market Bulls and bears are fighting wildly The main players are "harvesting emotions"
Three key points to always remember about triangles 1. The closer to the end, the more likely a direction will emerge 2. Breakouts should be judged by structure, not just a single candle 3. A pullback confirmation is worth more than the first breakout
Triangles aren't for betting on direction They're for waiting to see "who can't hold"
You only need to do one thing Wait for the market to choose sides on its own
Many people learn trading only by looking at prices But honestly—prices without trading volume are fake
Trading volume is not an indicator It is the evidence of whether "money is really moving" in the market
1. What is trading volume? Trading volume is how much was actually traded for this K line More buyers → volume increases More sellers → volume increases No one wants to buy and no one wants to sell → volume decreases
Volume = intensity of the battle between bulls and bears The larger the volume, the greater the divergence The smaller the volume, the more the market is on the sidelines
2. The 4 most common types of trading volume
Increased volume: the market is about to move Trading volume suddenly increases Represents: It may go up It may also go down
Low-level increased volume: The main force may be entering to accumulate
High-level increased volume: Be careful, the main force may start to sell off
Increased volume is not a reason to chase; it is a signal to "stay alert"
Decreased volume: the market is holding back Trading volume suddenly decreases Represents: No one dares to chase Or the main force is locking positions
Decreased volume during a decline → the drop is not significant Decreased volume during a rise → momentum is weakening Many consolidations and washouts are completed with decreased volume
Piling volume: the main force is tricking you into taking over Trading volume gradually becomes larger Looks very lively and strong
But in reality, many times: The main force is pulling while unloading
Piling volume usually appears in: High-level fluctuations Before selling off after a price increase Newbies are most likely to die here
Irregular increased volume: don’t chase Suddenly increased volume → then immediately decreases There’s a high probability that: The main force is testing orders / luring buyers / luring sellers When you see this kind of volume Resist, don’t chase
Understanding the relationship between volume and price in one go
Volume increases + price rises Bulls are strong You can follow the trend to go long
Volume increases + price drops Divided into two situations: Low level: may be a washout (wait) High level: high probability of selling off (run fast)
Volume decreases + price rises The main force controls the market Be cautious when prices rise too high
Volume decreases + price drops No one is taking First protect yourself, don’t average down
Volume stable + price moves The original trend is easy to continue Bulls and bears are temporarily balanced
1. Decline with increasing volume Not strong bearish But someone is swapping hands, building a bottom Sharp drop, large volume Represents panic selling being absorbed by those who are prepared
2. Rise with decreasing volume Not the end of the uptrend But the stage of pushing up doesn't require much volume The real volume Usually appears during "consolidation"
3. Consolidation with increasing volume Here's the key The larger the volume, the longer the consolidation → the farther the move afterward This is when the主力 (main force) is positioning
What is POC? Why must you check it?
POC = Price range with the highest volume The area where price is most likely to "return"
Usage is simple Test the POC When reversal or strength appears It's a high-probability entry zone
POC ≠ highest or lowest POC = The area with the most market consensus
How are demand zones / support zones formed?
Not just drawn casually like this: 1. After a drop, consolidation begins 2. Volume gradually accumulates 3. Breakout and leave this zone This area becomes the demand zone / order block
Four: Enter at rejected order blocks
Don't buy just because you see an order block You must wait for these three things: 1. Structure has turned: at least a higher low has formed 2. Re-test the order block: not the first breakout, but a return test 3. Confirmation: long lower shadow, engulfing pattern, consecutive green candles before entry
Volume is not direction It's "power"
Structure determines direction Volume determines whether it's worth trading
Order blocks Are just places where the主力 (main force) once acted
Trading actually only does one thing Acting in the 'right structure' First, get the order right Otherwise, no matter how many patterns you have, it's useless
Seven types of pattern structures, you only need to divide them into two categories
1. Continuation type (continuing to rise or fall) Rising wedge / Flag / Symmetrical triangle Usage: Wait for a retracement after a breakout Do not chase the price on the first breakout
2. Reversal type (the direction is about to change) Bearish channel ending / Head and shoulders / Double bottom / Double top Usage: Structure destruction + appearance of higher lows / lower highs counts
How to find a 'good trading setup'? Just look at four steps
Step 1: First, check for the presence of trend lines No trend = don't rush to act
Step 2: Mark support / resistance zones Prices will only react in these areas
Step 3: Use Fibonacci to find retracements 0.5 / 0.618 are the most commonly used 'action zones'
Step 4: Set a stop loss first, then discuss profits No stop loss = this is not trading, it's gambling
What really decides whether you can enter is the K-line 'language'
You only need to remember these few types 1. Bullish signals Bullish engulfing Three inside up Rising three methods Three white soldiers
2. Bearish signals Bearish engulfing Three inside down Falling three methods
The key is not the shape But the position it appears in
Top K-line = reminding you 'it's time to stop' Inverted hammer Hanging man High engulfing
Where does it appear? Resistance zone / Near high points
It's not telling you to necessarily short It's reminding you: don't add more long positions
Patterns are not reasons to enter Structures are
K-line is not the answer It's the final confirmation
Those who make money Do not see more than you They just take fewer wrong actions
The King of Indicators: MACD's Strongest Entry and Exit Points, Hurry and Save It!
MACD's Eight Major [Buy] Patterns
Let’s start with the conclusion: Only use it in an uptrend structure, or at least when it’s not a downtrend.
1. Buddha's Hand Upwards Red bars continuously rising, shallow pullbacks. Usage: Add positions during the trend / Enter on pullbacks. Taboo: Easy to fail in a sideways market.
2. Little Duck Coming Out of Water Green bars shorten → Turn red. Usage: Confirmation of the first segment strengthening. Combination: Structure turns bullish, returns above the moving average.
3. Walking on Clouds Red bars gradually enlarging, not explosive. Usage: Safe holding type. Key Point: Not chasing, it’s “continuing to hold already in position.”
4. Swan Spreading Wings Red bars suddenly accelerate. Usage: Trend extension segment. Taboo: Don’t chase the first appearance at high levels.
5. Aerial Tangle Pullback above the zero line without breaking. Usage: Second entry during the trend. Many people fail to profit because they are afraid to wait.
6. Aerial Tangle Car Red bars fall back, but don’t turn green. Usage: Follow-up attack after shaking out. Combination: Price hasn’t broken crucial support.
7. Undersea Cable Turns red after prolonged low-level stagnation. Usage: Medium-term layout. Risk: Must control positions.
8. Fishing for the Moon in the Deep Sea Divergence in deep water + turns red. Usage: Left-side expert positions. Not recommended for beginners.
MACD's Eight Major [Sell] Patterns
Let’s be clear in one sentence: This is not a short-selling signal, it’s a reminder for “long positions to exit.”
1. Desert Burial Red bars at high levels begin to collapse. Behavior: Exiting in batches.
2. Earthquake Star Red bars explode in volume then quickly turn green. Behavior: Walk away directly.
3. Grandpa Crossing the Bridge Red bars bend down after being too high. Behavior: Don’t be greedy, run first.
4. Rough Journey Red bars fluctuate between large and small. Behavior: Market is not clean, reduce positions.
5. Boss Has No Shrimp Stagnation at high levels, declining momentum. Behavior: Exit while someone is still taking over.
8. Breath of Water Obvious divergence at high levels. Behavior: Liquidate all or most positions.
MACD is not for guessing market rises or falls. It is used to answer these three questions: 1. Is there “strength” in this segment? 2. Is it worth holding? 3. Should I exit?
People who use MACD Are not those with high win rates, But those who do many fewer bad trades.
Outside Bar is not a flashy pattern is a signal that the price is starting to expand
What is an Outside Bar? This current K has a higher high and a lower low completely engulfs the previous K regardless of red or green only look at "whether it completely engulfs"
What is the Outside Bar saying? The market is starting to increase volatility it is not a consolidation it is preparing to choose a direction
How to view it in a lower time frame? You will see that each pullback and push is getting larger prices are "opening up space"
Three practical uses
1. Find entry timing After an Outside Bar only do pullbacks not chase breakouts
2. Set stop loss Place stop loss outside the high/low of the Outside Bar if hit = pattern invalidated
3. Basis for holding The Outside Bar creates an expanding structure indicating there is still space only then is it worth holding
Key takeaway in one sentence The Outside Bar is not telling you to enter it is telling you that the market is getting serious
Will you make a profit? It depends on whether you wait for it to come back and follow the process
To understand the market, first grasp these three things:
1. EMA indicates trend direction 5 10 for short-term momentum 20 for rhythm 50 for trend boundary 100 200 is the last line of defense Price above EMA is bullish Below is bearish
2. EMA should be paired with price action Breaking support makes rebounds likely to turn into resistance Breaking resistance and then retesting is a good entry Be cautious of false breaks If it doesn't reclaim EMA, don't chase
3. Volume determines authenticity Rally with volume, pullback with low volume Healthy trend Can buy on pullbacks High volume but not moving far Most of the time, it's a false move
4. Bearish signals in supply zones Long upper shadow Spinning top K Hammer Double top Appears in supply zones It signals a preparation to weaken
5. How to view a downward structure Breaking key support Rebound not exceeding previous highs Double top established Trend officially turns bearish
6. Reversals only do "retests" Trendline Fibo 0.5 Key support and resistance No retest, no entry
In summary: Trend relies on EMA Entry and exit rely on structure Authenticity is seen through volume Don't rush, and it's less likely to lose
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1. Bottom long legs Long lower shadows = strong support below, bears are absorbed Common at bottoms, tends to signal a rebound
2. Bottom doji A tug-of-war between bulls and bears, direction undecided Appears at low levels = pay attention to potential strengthening opportunities, but wait for confirmation
3. Suit and tie big bullish candle Full-bodied, almost no shadows = bulls completely in control Strong activation, tends to continue rising
4. Two hammers staking Consecutive lower shadows = bottom repeatedly tested but held Clear support, high chance of rebound
5. Big bullish engulfs small bearish Bulls directly engulf bears Clear strengthening signal, leaning bullish
6. Morning star Decline → hesitation → strong counterattack Bottom reversal structure, needs to be confirmed with subsequent candlesticks
7. Big bearish followed by two small bullish Bearish momentum weakening, bulls start to test for recovery Leaning towards stopping the decline, focus on whether it breaks below the low of the big bearish candle
8. Two bullish candles cannon Two consecutive strong bullish candles, directly breaking pressure Bulls' main attack pattern, high probability of continuing to rise
K Line Chart Overview (First Understand the Structure) Key Points to Remember: 1. Body = Real Battle Zone of Bulls and Bears 2. Upper Shadow = Pressure from Above 3. Lower Shadow = Support from Below To judge strength, look at the body, not just the shadows
K Line Brothers (Bullish / Bearish) Bullish: Close > Open, Bullish Dominance Bearish: Close < Open, Bearish Dominance Market Direction = Who 'carries' the price back
Common Bullish Chart Patterns (Bullish Rhythm) Focus on Key Points, Don’t Memorize Terms: 1. Larger Body → Stronger Bullish 2. Shorter Shadow → More Decisive 3. Small Body → Mostly Consolidating, Observing Strong Bull = Large Body, Clean Close
Common Bearish Chart Patterns (Bearish Rhythm) Judging Method is the Same: 1. Large Body Bearish → Bearish Dominance 2. Long Shadow → Resistance, but not necessarily successful 3. Small Body → Stagnation, Waiting for Direction Don’t Guess Reversals, Respect the Trend First
Common Mistakes Newbies Make 1. Only Look at K Line Shapes, Not Positions 2. Guess Reversals upon Seeing Shadows 3. Ignore Volume, Only Look at Color Correct Order: Position → Structure → K Line → Volume