Trend traders should be experts in dealing with shocks. It's like the real role of a doctor is not to make people healthy, but to cure diseases. All trend traders are essentially doing "box" breakthroughs, whether it is a tangible box or an intangible box, triggering the upper rail to go long and triggering the lower rail to go short. There is no absolute objective standard to judge whether a market is oscillating or not. It depends on the box setting of the trader himself. This person's trend is another person's shock. This characterization is actually subjective. Try to classify shocks. 1. According to the direction of movement, it can be divided into same-direction shocks and two-way shocks.

The difference between the two is that one repeatedly breaks through and pulls back in the same direction, while the other breaks through and pulls back in two different directions, long and short.

We will skip the same-direction oscillation because to a large extent this can also be characterized as a trend, but it is not smooth. Other answerers have also mentioned that sometimes trends and oscillations are not clear-cut and there is a gray area, which is the so-called "trend with oscillations".

2. Detailed explanation of two-way oscillation: (1) According to the fluctuation range, it can be divided into narrow range oscillation and wide range oscillation. The so-called narrow range is within the box, while the wide range is able to trigger the box repeatedly.

Narrow range fluctuations are not a cause for concern, because we can completely tolerate and avoid them, and we just need to be patient. (2) Wide range fluctuations can be further divided into high frequency and low frequency according to the frequency of long and short movements.

In fact, for many trading systems that respond more sensitively, the latter is not considered an oscillation, and can be finely divided into multiple "small trends". This is the so-called "trend in the oscillation". Why do I mention the issue of frequency? Because futures and options have expiration dates, and perhaps the price will eventually return, but the frequency is too low, and the money will not be returned in the end. (3) The essence of the same-direction oscillation is that the market pricing efficiency is high, and the long and short forces are evenly matched. As the strength of the long and short forces increases and decreases, there is:

Expansion shock and contraction shock. In traditional technical analysis, they are also called flag consolidation. They have different names but the same essence. These two patterns reveal that the long and short positions are getting more and more courageous and the battle is tense, while the long and short positions are becoming more and more depressed and the market is stagnant. The former is a headache for me, while the latter is obviously gradually approaching a game point that is worth betting on.

3. OK, after the above classification, the question is: Can we know in advance whether the next trend is a trend or a shock? Some say yes, some say no. I won’t discuss it here because that is another question. To put it another way, if we think that the next trend is likely to be a shock, can we know in advance what kind of shock it will be?

I don't think so.

If that’s not possible, what should we do?

We need a strategy, or some trading rules, whose goal is not to avoid volatility.

Instead, it is: no matter which of the above happens next, I can deal with it. The bottom line is that I will never suffer a big loss due to the occurrence of a certain situation; secondly, I strive to lose less or even no loss in certain specific circumstances; finally, with the blessing of luck, I may even make a profit.

If you can combine the trading system and trading strategy (rules) to produce such an effect, then you will have the trading ability of "advance and retreat with evidence". At this time, you will not ask how to avoid shocks, because there is no need.

For example, looking back at the previous article, we roughly classified the possible shocks that we may face. Although the market is ever-changing, this is just one of them. Maybe your classification method is different from mine. Suppose you can classify 8 types, then as long as you can keep the risk under control or even have a relative advantage in 6 of them, and only stop loss (even continuously) in 2 cases (and preferably rare cases), then such a strategy is stable and excellent enough. #5月非农数据即将公布