The relationship between pattern and trend: How to understand that pattern is the mother of trend?

小明的交易思路 · 2023-09-26T07:45:39.000Z

Written before: Any downward breakthrough in the bull market may be a washout; until the trend changes! Any upward breakthrough in the short market may be a pump-and-dump; until the trend changes! Only with a perfect form can a trend with larger space unfold! The so-called form is essentially a process in which bulls and bears repeatedly compete for a band within a certain range. Before the end of this process, there is no winner or loser in the battle between bulls and bears, but as it comes to an end, the winner becomes clearer. Once the winner is determined, The trend inevitably unfolds. From this, it is not difficult for us to draw the following conclusions: First, there is a pattern first and then a trend. Without a pattern, there is no trend. There is no one-sided trend from beginning to end. It is very important to understand this point. Follow this thinking to observe and judge the period. Market opportunities and their timing are extremely important. Second, forms of great value are not easy to form and break through. The reason why they are so valuable is because both the bulls and the bears have invested a lot of troops and fought for a long time. No one is willing to give in easily, so it is not easy to break through. But once a breakthrough is made, the value It is very important, because the subsequent trend movement is astonishing, it is the general trend, and it is beyond human control. Third, once a breakthrough occurs, it marks the victory of one party, and the defeat of the other party is inevitable. This means that a trend will follow the pattern. Large patterns will lead to big trends, small forms will lead to small trends, and medium forms will lead to medium trends. Once the trend unfolds, It is not easy to end until the energy is released and new forms take shape. Fourth, the trend originates from the form, the trend is generated by the form, the form is the mother of the trend, the form is the foundation of the trend, and the form is the prerequisite for the generation and existence of the trend. Therefore, we have no doubt about the starting point of thinking for trend research and observation. It is a form, not a trend, let alone a local price performance. Therefore, our trading solution should also start from the form, based on the form, and before the trend unfolds, we can foresee the direction, level, strength and weakness of the trend from the form. and other core information. In other words, the direction, size, strength, etc. of the trend have been determined before the trend is formed and unfolded. Therefore, once the pattern breaks through, there is no need to care and re-judge the direction, size, and strength of the trend.It is useless to care, and re-examination will not produce new correct information and further beneficial results. On the contrary, re-examination shows that you have no confidence in the trend. How to hold or open a position without confidence? Many traders fail because their starting point of thinking is wrong. They like to decide buying and selling based on the local performance of the trend. If the local performance is good, they will buy, otherwise they will sell. But we believe that if the starting point of thinking is wrong, it is impossible to draw the correct conclusion. The correct trading decision has been determined at the beginning of the trend. Decision-making during the trend development process is very passive, because the winning main force has already made a certain profit, and he can withstand price oscillations due to floating profits. And you can still maintain a good mentality, but you can't, because you don't have the advantage of floating profits. Once you encounter a oscillation, your mentality cannot be immune to the impact. Once the stop loss level is hit, it is impossible to stop the loss. In addition, because the band amplitude within the pattern is too small, many investors repeatedly make narrow profits. Therefore, even if the pattern breaks through, they will not have confidence in the trend. Restricted by this psychological shadow, they will leave the market as soon as they encounter resistance. When encountering a larger rebound or pullback, you will doubt the trend and re-examine the argument. The result will always be a small-band light position operation, making a small amount of money and then running away. However, once the rhythm is not set correctly, not only will there be no profit, but also a small loss, and in the end, overall I still made money but lost money. Fifth, the trend will only progress rapidly after the form breaks through. Without breakthrough, there will be no rapid progress. Without rapid progress, the outcome will still be unpredictable. Without rapid progress, it will not be easy to hold a position, and it will not be easy to increase a position. Confidence and evidence. But sometimes, after the pattern breaks through, it does not start smoothly immediately, but there will be a retest or consolidation for one or several days. At this time, it is most likely to lose the position or have no confidence in adding a position after dawn; then rapid progress occurs. , the price once again significantly deviated from the pattern, but investors pursued it with confidence. As a result, once the intraday retracement occurred, positions became passive again, resulting in continuous rushing in and out of the trend. In the end, even if there was a pattern and trend, Didn't make any money either. In short, the huge impact of patterns on investors' trading mentality is not only reflected in the patterns, but also often reflected in the trends after the patterns break through. Only by overcoming this mentality restriction can you truly enter pattern trading and follow the trend traders. of ranks.After the pattern breaks through, holding the position until the stop loss level is reached is the only correct choice for pattern trading. It is important to remember that opportunities are waiting for them, and profits are made by covering up, not grabbing. Trading by grabbing will not succeed. , if you have no confidence in the trend, there is no use rushing in and rushing out. On the other hand, if you have confidence in the trend, there is no need to rush in and rush out. It should be said that confidence and trading techniques have been determined before the pattern breaks through. Rushing in and out has serious consequences. Not only does it always put your position mentality in an unstable state, no matter whether it is profit or loss, but it also always makes you annoyed for wasting the trend. What if there is no form? As we have said before, there is no one-sided trend from beginning to end. A one-day reversal without a head pattern or a bottom pattern only exists in a state of extreme price imbalance. Even if it is a one-day reversal, there is just no head. It is just a pattern or a bottom pattern, but it does not mean that it does not have a relay pattern. Single-day reversals without even relay patterns are rare. It can be seen from this that we should be careful about single-day reversals, even if there are conditions for a single-day reversal. It's not difficult to judge. Therefore, we believe that if there is no condition for a one-day reversal and there is no reversal pattern, then please continue to abide by the original trend and continue to hold positions until the trend accelerates. There is no trend that does not accelerate! There is no form that does not break through. The relationship between supply and demand is always difficult to balance. Balance does not exist. Imbalance is the norm. Therefore, there is no form that will not break through. The breakthrough of the form is only a matter of time. Knowing and fully understanding and accepting the relationship between patterns and trends and their laws does not mean that you can use this to make money, because there is a lot of interference. The main manifestations are: the band amplitude within the pattern is too small, and the profit will be too narrow. It deeply affects your profit expectations and position mentality, including after the pattern breaks through, and the trend is no exception. You always hear a lot of seriously bad news in the bottom pattern area, and you always hear a lot of seriously bullish news in the top area. This will inevitably affect your confidence in the pattern and its subsequent trend, including your confidence in holding positions. The development of a trend, especially in the early stages, is not always smooth sailing, and the mentality of holding a position will always be tested to a certain extent.Some forms are quite difficult to grasp. For example, the double bottom form is often determined to be a double bottom only after the fact, and cannot be completely determined beforehand. The pattern before and after the breakthrough conflicts with certain technical indicators or analysis methods. Do you still have confidence in the pattern and its breakthrough? Can the mentality of holding a position remain unaffected? Although there are not many false breakthroughs in the form, once they occur, there is not much difference between the initial retest and the normal retest after the breakthrough, so it is quite difficult to deal with it. If you handle it wrong one or more times, resulting in losses or lost opportunities, you Are you still confident about the pattern and its breakthrough? When the pattern contradicts certain authoritative judgments, do you still have confidence and persistence in the pattern and its breakthrough? When the pattern breaks through, the rise and fall are already large. Do you dare to chase it? If you dare to chase, aren't you afraid that it will be a false breakthrough? After the pattern breaks through, if the pullback is strong, do you still believe that the breakthrough is effective? When you miss the opportunity to open a position, do you give up or intervene forcefully? Some shapes are very hidden and not very symmetrical. Can you spot them in time? Such situations are not uncommon, nor are they all. They often occur in mixed situations, making it more difficult to judge and hold positions. Are you still confident in the pattern and its breakthrough? These are factors that cannot be ignored that trouble pattern trading.

Written in front:
Any downward breakthrough in the bull market may be a shakeout until the trend turns! Any upward breakthrough in the bear market may be a pull-up and sell until the trend turns! Only a perfect pattern will unfold a trend with a larger space!
The so-called pattern is essentially the process of long and short positions repeatedly fighting for the band within a certain range. Before the end of this process, the long and short positions have not yet been determined, but as the process draws to a close, the winner becomes clearer and clearer. Once the winner is determined, the trend will inevitably unfold. From this, it is not difficult to draw the following conclusions:
First, there is a pattern before there is a trend. There is no trend without a pattern. A one-sided trend from beginning to end does not exist. It is crucial to understand this point clearly. It is extremely important to observe and judge the opportunities and timing of the futures market according to this thinking.
Second, it is not easy to form and break through a pattern with great value. The reason why it is of great value is that both sides have invested a lot of manpower and fought for a long time. No one is willing to give in easily, so it is not easy to break through. However, once a breakthrough is made, the value is very great, because the subsequent trend movement is amazing, which is the general trend and beyond human power. Third, once a breakthrough is made, it means that one side wins and the other side is inevitably defeated. This means that there must be a trend after the pattern. A large pattern will produce a large trend, a small pattern will produce a small trend, and a medium pattern will produce a medium trend. Once a trend is launched, it is not easy to end until the energy is released and a new pattern is gradually formed. Fourth, the trend originates from the pattern, and the trend is generated by the pattern. The pattern is the mother of the trend, the pattern is the foundation of the trend, and the pattern is the prerequisite for the generation and existence of the trend. Therefore, the starting point of our thinking for trend research and observation is undoubtedly the pattern, not the trend, let alone the local price performance. Therefore, our trading solution should also start from the pattern and be based on the pattern. Moreover, before the trend unfolds, we can foresee the core information of the trend, such as the direction, level, size, strength, etc.
In other words, the direction, level, strength, etc. of the trend have been determined before the trend is formed and unfolds. Therefore, once the pattern breaks through, there is no need to worry about or re-evaluate the direction, size, and strength of the trend.
There is no point in caring about it. Re-evaluation will not bring new correct information and further beneficial results. On the contrary, re-evaluation shows that you have no confidence in the trend. How can you hold or open a position without confidence? Many traders fail because their starting point of thinking is wrong. They like to decide to buy or sell based on the local performance of the trend. If the local performance is good, they will buy, otherwise they will sell.
But we believe that if the starting point of thinking is wrong, it is impossible to draw the correct conclusion.
The correct trading decision has been determined at the beginning of the trend. Making decisions during the trend development process is very passive, because the winning main force has already made a certain profit. He can withstand price fluctuations due to floating profits and still maintain a good mentality, but you cannot, because you do not have the advantage of floating profits. Once you encounter fluctuations, your mentality will inevitably be impacted. Once the stop loss level is reached, it will be impossible not to stop the loss.
In addition, many investors believe that the amplitude of the wave within the pattern is too small, and the wave profit is repeatedly narrow. Therefore, even if the pattern breaks through, they will not have confidence in the trend. Affected by this psychological shadow, they will leave the market when they encounter resistance. When they encounter a larger rebound or pullback, they will doubt the trend and re-argue. As a result, they always operate with small waves and light positions, and run away after making a little money. Once the rhythm is not good, not only will they not make any profit, but they will also suffer a small loss. In the end, they still make money in the direction but lose money overall.
Fifth, the trend will only make rapid progress after the pattern breaks through. Without a breakthrough, there will be no rapid progress. Without rapid progress, the outcome will still be unpredictable. Without rapid progress, holding positions will not be easy, and there will be no confidence and basis for adding positions.
But sometimes, after the pattern breaks through, it does not develop smoothly immediately, but there will be a one-day or several-day pullback or consolidation. At this time, it is easiest to lose positions after dawn or have no confidence in adding positions; then rapid progress occurs, and prices once again move significantly away from the pattern, but investors are confidently chasing it. As a result, when there is a pullback during the session, positions become passive again, resulting in continuous rushing in and out of the trend. In the end, no money is made even if there is a pattern and a trend.
In short, the huge impact of patterns on investors' trading mentality is not only reflected within the patterns, but also often reflected in the trend after the pattern breaks through. Only by overcoming this mentality constraint can you truly enter the ranks of pattern traders and trend traders.
After the pattern breaks, holding the position until the stop loss is reached is the only correct choice for pattern trading. Remember that opportunities come from waiting, and profits come from holding, not from grabbing. You will not succeed by relying on grabbing. If you have no confidence in the trend, it is useless to rush in and out. On the contrary, if you have confidence in the trend, there is no need to rush in and out. It should be said that confidence and trading techniques have been determined before the pattern breaks. Rushing in and out has a lot of harm. Not only does it always make your position mentality unstable, whether it is profit or loss, but it also always makes you feel annoyed for wasting the trend. What if there is no pattern? In the previous section, we have said that there is no one-sided trend from beginning to end. A one-day reversal without a head or bottom pattern only exists when the price is extremely unbalanced. Even if it is a one-day reversal, it just does not have a head or bottom pattern, which does not mean that it does not have a relay pattern. A one-day reversal without even a relay pattern is rare. It can be seen that we should be cautious about a one-day reversal. Even if there are conditions for a one-day reversal, it is not difficult to judge.
Therefore, we believe that if there are no conditions for a one-day reversal and no reversal pattern, then please continue to follow the original trend and continue to hold your position until the trend accelerates. There is no trend that does not accelerate! There is no pattern that does not break through. The supply and demand relationship is always difficult to balance. Balance does not exist. Imbalance is the norm. Therefore, there is no pattern that does not break through. The breakthrough of the pattern is just a matter of time. Knowing and fully understanding and accepting the relationship and rules between the pattern and trend does not mean that you can make money with it, because there are many interferences, mainly manifested in: The band amplitude within the pattern is too small, and the profit is too narrow, which will deeply affect your profit expectations and position mentality, including after the pattern breaks through, and the trend is no exception. In the bottom pattern area, there are always a lot of serious bad news, and in the top area, there are always a lot of serious good news. This will inevitably affect your confidence in the pattern and its subsequent trend, including your confidence in holding positions.
The development of trends, especially in the early stages, is not always smooth sailing, and the mentality of holding positions will always be tested to a certain extent. Some patterns are quite difficult to grasp. For example, the double bottom pattern is often determined to be a double bottom after the fact, and it cannot be completely determined beforehand. Before and after the pattern breaks out, it conflicts with certain technical indicators or analysis methods. Do you still have confidence in the pattern and its breakthrough? Can the mentality of holding positions remain unaffected? Although there are not many false breakthroughs in the pattern, once it occurs, there is not much difference between the beginning and the normal test after the breakthrough, so it is quite difficult to handle. If you handle it wrongly once or several times and cause losses or lose opportunities, are you still confident in the pattern and its breakthrough?
When the pattern is contrary to some authoritative judgment, are you still confident and persistent in the pattern and its breakthrough? When the pattern breaks through, the rise and fall are already large, do you dare to chase? If you dare to chase, aren't you afraid that it is a false breakthrough? When the pattern breaks through, if the callback is strong, do you still believe that the breakthrough is effective? When you miss the opportunity to open a position, do you give up or intervene forcefully?
Some patterns are very hidden and not very symmetrical. Can you find them in time? This situation is not uncommon, nor is it all. It often appears mixed, making it more difficult to judge and hold positions. Are you still confident in the pattern and its breakthrough? These are factors that cannot be ignored when troubling pattern trading.

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