Two key principles of trading: Recognize "Momentum," and be good at "Patience"
To succeed in trading, I believe the core lies in two words: "Momentum" and "Patience."
1. First understand "Momentum": Trend is direction, and also power
Momentum is the energy of price moving in one direction over a certain period.
There are distinctions between major momentum and minor momentum:
Macro Cycle > Major Cycle > Medium Cycle > Minor Cycle > Micro Cycle.
- Macro Cycle: Monthly Chart
- Major Cycle: Weekly Chart
- Medium Cycle: Daily Chart
- Minor Cycle: 30-Minute Chart
- Micro Cycle: 5-Minute Chart
The key logic is: the larger cycle determines the direction, the smaller cycle finds the entry point.
If the monthly and weekly trends are up, we wait for the daily or smaller cycle to show a signal of the end of the pullback, going long with the trend. Conversely, the same applies.
How to judge the strength of the "flow"?
Using three tools (taking the weekly chart as an example):
60 line: long-term trend direction
20 line: medium-term trend direction
MACD: Confirmation of short-term momentum
When all three are aligned, the trend is established.
But even with an increase, the angle determines the extent:
The angle of the 60 line and the 20 line is flat ↗ → Weak trend, hesitant market
The angle of the 60 line and the 20 line is steep ↗↑ → Strong trend, lasting market
For example, in the weekly chart of the Shanghai Composite Index:
If the 60 line and the 20 line are both moving up in sync and the angle is relaxed, the MACD golden cross confirms that it often leads to a considerable upward wave.
At this time, every time the price pulls back to near the 20 line and shows a stabilizing bullish line, it is a potential opportunity to go long with the trend.
Main trend vs secondary trend
Friends who like counting waves can understand it this way:
One wave up (main trend) → Two waves pullback (secondary trend) → Three waves main rise (main trend).
Our system enters at the "turning point" when the secondary trend (pullback) ends and the main trend resumes*.
This is the core of the "multi-cycle mean reversion turning point trading system":
Establish direction on the weekly chart, wait for the daily line to pull back, and find patterns and candlestick signals on the 30-minute or hourly chart to achieve multi-cycle resonance trading.
Two, let's talk about "Wait": resonance is the real opportunity
Having "flow" is not enough.
For example, currently: the weekly trend is up, but the daily trend is down. Should one follow the weekly line to go long, or follow the daily line to go short?
The answer is: do nothing.
Trading is not about seizing every cycle, but waiting for multi-cycle resonance
Weekly trend up + daily trend also up → Go long
Weekly trend down + daily trend also down → Go short
If the directions between cycles are contradictory, it indicates that the market has not yet formed a cohesive force. At this time, all we need to do is one word: wait.
What to wait for?
Wait for the daily MACD to strengthen, pull the 20 line back up, and make the daily trend follow the weekly direction again;
Or wait for the daily trend to bring the weekly trend down, forming a reversal confirmation.
Real trading opportunities may only occur a few times a year.
Frequent trading will not make you richer; instead, it will consume your capital and patience.
Trading once a year in a high certainty resonance market, then resting and waiting, often yields far more than the busyness of entering and exiting every week or even every day.
Three, behind "flow" and "wait" is actually mind cultivation
Technical systems can be quantified, but the execution system is human.
I know to "go with the flow", but I can't help but trade back and forth in the fluctuations;
Understand that you need to "wait", but always fear missing the market and enter early.
Therefore, cultivating the mind is a required course in trading.
Only by letting go of distractions and overcoming fear and greed can one act calmly within their own established rules.
In the complex fluctuations of the market, maintaining clarity and discipline is the true foundation for stable profits.
Trading is not about who does more, but about who sees clearer and waits steadier.
"Flow" is direction, "Wait" is rhythm.**
See the big trend clearly, patiently wait for the resonance opportunity, then act calmly — this may be the simple mindset to traverse market fluctuations and achieve long-term survival.