Traders must understand that the distinction between the three price phases proposed by Dow Theory (primary upward wave, secondary downward wave, daily fluctuations) can be used to understand trends, but during specific operations, one must never artificially guess in advance; it must be a step-by-step approach.
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This is because price fluctuations are essentially the fluctuations of all participants' emotions. There are no formulas or theorems for human emotions, which have remained unchanged since the dawn of humanity—greed, fear, anxiety over gains and losses, and the desire to win versus the fear of losing.
Therefore, a large number of historical charts can find relatively objective and nearly accurate methods, which is to use the average price (moving averages) as a reference to understand trend levels, and then determine the high and low points of the same level along with the average price, thus defining the high and low points for upward, downward, and consolidating operations.