First, the average price encompasses and digests all factors. The fundamentals, policy, news, and capital can all affect supply and demand relationships, and all of this will be intuitively reflected in the market, ultimately the market absorbs it through price changes.
Second, the market has three types of trends. Dow divided trends into three categories: primary trends, necessary trends, and fleeting trends. Primary trends are like the tides of the ocean, belonging to long-term trends, similar to the cyclical changes of the four seasons, with bull and bear cycles having no beginning or end. Secondary trends are the waves in the tides representing the pullbacks in the primary trend, typically retracing to the three important Fibonacci levels of 38%, 50%, and 62%. Fleeting trends are ripples, referring to subtle fluctuations that have high uncertainty and change rapidly.
Third, large trends can be divided into three phases. The first phase is the accumulation phase, similar to the negative pole giving rise to the positive; it means that as the bear market approaches its end, although everyone is bearish, it has already fallen to its limit, and the main force begins to accumulate in batches at this time. The second phase is the bullish attack phase, where favorable news begins to emerge, and most retail investors with some technical knowledge gradually enter the market, with prices starting to rise. The third phase is the climax sprint, when major media outlets begin to flood the market with good news, making bold predictions for continued price increases, retail investors actively buy in, and no one wants to sell, fearing they will miss this rare opportunity to make money, but in reality, the main force that bought at the bottom has already started to sell off.
Fourth, various average prices must mutually verify each other. For example, only when the joint increase of Bitcoin and mainstream coins exceeds the previous mid-trend peak can we say that a large-scale bull market has arrived! Similarly, if the joint decrease of Bitcoin and mainstream coins breaks below the neckline position of the high-level fluctuation phase in the bull market trend.
Fifth, trading volume must verify the trend. Dow believes that volume is second in importance in technical analysis; when the price is developing along the major trend, trading volume should also increase accordingly.
Sixth, only after a clear and undeniable reversal signal occurs can we determine that an established trend has ended. A significant trend has inertia and usually continues to move in its main direction for a while, so we must wait for the trend to confirm the reversal, such as the head and shoulders pattern confirming the break below the neckline to be considered a trend reversal.
These days, I am preparing to launch a divine order!!!
Comment 168, let's get on board!!!
Impermanence brings impermanence brings impermanence!!!
Important things are said three times!!!
