📍K Line Combination Pattern Application — ABCD Zone Trading

It has been a while since I updated this teaching series. This is a relatively simple trading system that I saved last year, which includes entry and exit points, somewhat similar to the use of trendline breaks.

It can be used to determine buy and sell point areas; the buy point is based on a reversal logic, while the sell point is based on an exit logic when encountering resistance.

It is suitable for naked K right-side trading, buying on a reversal in the C zone after entering B, and selling at resistance in the D zone.

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- Pattern Principles 🔻

(1) The initial shape extends from the A zone, based on connecting and extending the low and high points of the K line in the A zone to form other areas.

(2) The B zone cannot be used as a buy point area because once it encounters a large market movement, it will be difficult to escape, and can only make a reversal at the end of the trend.

(3) The D zone is an extension area of market resistance from 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 candle appears, the current pattern cannot be used as the main basis for trading; otherwise, many trading opportunities will be lost.

(2) A breakout of the C zone trendline from the B zone is a buy point, but caution should be taken for false breakouts, so combining buy points with trading volume analysis would be better.

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

(4) Although this system can serve as a main reference, it should not be used as a single indicator; it is recommended to combine it with other technical indicators for judgment.

(5) The buy point in this indicator is right-side style, while the sell point is somewhat left-side, as the entry point is after confirming a breakout, while the sell is based on a subjective assumption that the resistance at this point is effective, possibly indicating a local top.