📍K Line Combination Pattern Application — ABCD Zone Trading

It has been a while since I updated this teaching series, and this is a relatively simple trading system I saved last year, which includes buying and selling points. It is somewhat similar to the use of trend line breaks.

It can be used to determine buy and sell point areas, where the buying point is based on a reversal logic, and the selling point is based on a resistance exit logic.

Suitable for naked K right-side trading, buy in the C zone when B enters, sell in the D zone at resistance.

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- Pattern Principles 🔻

(1) The initial pattern extends from the A zone, connecting the low and high points of the A zone K line to form and extend other zones.

(2) The B zone cannot be used as a buying point area, because once it encounters a major market movement, it will be unable to escape and can only perform reversals when the trend ends.

(3) The D zone is the resistance extension area of the A zone, so selling when reaching or being in the D zone is a prudent choice.

- Extension Notes 🔻

(1) Once the market leaves the A zone and enters the B zone, and a large bearish candlestick appears, the current pattern cannot be used as the main trading basis; otherwise, many trading opportunities will be lost.

(2) A breakout of the C zone trend line in the B zone is a buying point, but one must guard against false breakouts, so combining the buying point with trading volume analysis is better.

(3) Once the market falls back from the C zone to the B zone, sell unconditionally, as this may indicate that the market will continue.

(4) This system can serve as a primary reference, but should not be used as a single indicator; it is advisable to combine it with other technical indicators for assessment.

(5) The buying point of this indicator is of a right-side style, while the selling point is somewhat left-sided, as the buying point is entered after confirming the breakout, whereas the selling point is based on subjective human assessment of resistance at that point, which may be a local peak.

This article is not long and is relatively easy to understand. Thank you for following @Eric SJ .