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