Basic Trading Framework for Beginners (4)
I. "Trading should be rule-based or even simplified"
In other words, you need to have rules before entering the market. You need to know why you are entering the market, and it is best to have only a few rules. It is also best to only trade in patterns that you are familiar with. Although there will be fewer opportunities, the success rate will increase, and the loss will decrease.
For example, some people specialize in breakouts, some in consolidations, and others in trendline trading.
For example: Most of the time, I only do "retracement-support-rebound" after a breakout and "rebound-resistance-decline" after a breakdown.
In terms of entry rules, let's take "retracement-support-rebound" after a breakout as an example
There are only three points in Figure 1. BLUR, which I recommended the day before yesterday, and SUI just now all follow this set of rules:
âą After the price breaks through the original resistance area, it retraces to the original resistance area and finds support and rebounds.
âą The buying capital column is dominant, and the continuous increase in volume is better.
âą The candlestick chart closes above the yellow line after retracing.
The red arrow in Figure 2 is the exit method of $BLUR that I mentioned
Exit methods for two unilateral market conditions:
âą Clear the position with a reduced volume after the buying capital column crosses below the yellow line again
âą Reduce the position when the candlestick chart starts to fall after penetrating the white line, and clear the position when it falls below the white line
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