Trading involves two questions: what is the current situation and what will the future look like?

All the candlestick charts, moving averages, indicators, patterns, momentum, etc., are meant to tell you what the current situation is.

Today, we have a large bullish candle with a 5% gain. Currently, it is above the 5-line, which is trending upward at a 45° angle. Is the KDJ indicator just above 50 useful? Yes, but not very much. Do you know why the probability of drowning is much higher when swimming in the sea than in a pool? Because the sea is too vast, and you can't see where you are at all.

So how do we deal with the future?

Unfortunately, as long as you are human, there is no way.

Therefore, we have added three major assumptions:

1. History will repeat itself;

2. Prices have already reflected all information.

3. Prices move according to trends.

Using indicators to understand the present, and using assumptions to point toward the future, problem solved.

Have we really solved it?

Are all three major assumptions correct?

It doesn't matter; to see the future, we must make assumptions. What you see far off is a grand strategy; pushing benefits works this way, and the same goes for protracted warfare. Prices move according to trends; we know where the trend is now, and according to the trend, I also know where it should be next week. Holding onto the current position, we predict the future through assumptions, and that's all there is to it.