Principles

A discussion on technical principles.

Zeroth Law - rule of buy resistance & sell support
In bull market, buy on break resistance, sell on break support. This method works because that's the most basic idea majority of market participants follow. Resulting in the herd action which is necessary to support a trend.

Acceptance - trends is testing and establishing of boundaries
If you learn to look at trend this way, suddenly everything becomes clearer. Its all about testing water and breaking new grounds, so to speak. However, note that market can "accept" a false territory longer than you expect, before a nasty turn.

Consensus - huge tradable moves occur after consensus in price
Consensus basically means indecision as price stagnate within a small range. At this point, participants choose and take up their sides. When trend finally appears in one direction, wrong participants are forced to switch sides, strengthening the trend.

Timeframe - trade in the direction of the next bigger timeframe
Important concept to emphasize on the big picture. Visualise this - in every small movement there is an "invisible" but real force influencing it. That force is a herd of market participants sitting sidelines looking at the big picture.

Symmetry - suggest potential support levels after trend reversal
Another method that works because so many people are relying on it, creating a self-fulfilling prophecy. Symmetry forms the basis of estimating the potential/timing of up and down waves of a cycle, and hints magnitude of the upcoming move.

Pattern - trading edge through probability of entry & exit points
Chart patterns help to visualise the interaction between supply and demand. Supply in excess of demand lead to price depreciation. Demand in excess of supply leads to price appreciation. The smaller pattern is influenced by the bigger pattern containing it.

Failure - every method is set to fail no method is always profitable
If not everyone will be a millionaire and the efficiency of economic systems will break down. Cutting losses short and letting profits run, coupled with sensible trading methods, sets the longterm winner apart from the longterm loser. 要赌, 必须服输.