Both trailing trends and contrarian thinking are ultimately meaningless

If the direction is not determined, contrarian trading is effective

If the direction is determined, trend-following trading is effective

About the direction change, it’s just that

So if the direction is clear, it becomes about relentlessly aiming for the correct direction with only a small loss in one shot

Direction not determined → direction becomes determined → it won’t keep heading in that direction

In this decline, stop-losses wander

Direction not determined → contrarian traders profit

Direction determined → trend-following traders are in profit with unrealized gains

If it won’t head toward the direction, trend-following traders take losses while contrarian traders profit

If it heads toward the direction, trend-following traders make huge unrealized profits

Direction not determined = range

Direction determined = trend

If it won’t head toward the direction = small trend, medium range

If it heads toward the direction = medium trend, large trend

With this flow, the market is covered

In trends and ranges

It’s just an occurrence of short-term, medium-term, and long-term

We cannot know that tendency; if possible, it would be all profit, right?

Contrarian traders profit in small ranges

A small trend arrives, and without heading in a direction, it ends up being a medium-range, so contrarian traders profit again

That’s all there is to it

Reasons to adopt a direction-change logic

The logic of following or opposing the trend is too simplistic; there is no clear basis for an edge

Because the market frequently changes direction

First, contrarian trading profits, and finally trend-following profits — that’s all

Both become around zero

When doing fractal trading

It becomes a reverse-trend in the opposite direction at the top

When it becomes a medium-term trend, this logic becomes worthless

Therefore

Direction-change logic is the most effective

In a small trend, the short-term chart functions

In a medium trend, the medium-term chart functions

In a large trend, the long-term chart functions

If it’s a medium trend but you analyze the long-term chart, unrealized gains will be substantially reduced before taking profits

Profit-taking at a small trend position = meaningless

Because it isn’t more effective than a small-range trade

For profit-taking, it would be in the

positions of the medium trend or large trend

In the case of a medium trend, take profits at a temporary high/low

In the case of a large trend, take profits at a direction change

In contrarian trading

Profit is only possible in a small range and a medium range

In other words, the profit-taking levels in the positive and negative directions are completely opposite

There is no logic requiring a stop loss

A stop loss is merely a way to leave the losses to the machine

If losses become manual, that is unacceptable

In the opposite-direction logic

Namping (adding positions) occurs at the position of small-range trade → then middle-range trade

This is how it goes

If it moves against you further, it becomes a large range

Unrealized losses just keep increasing

The optimal profit-taking position is

In the middle range

Middle range means

During the formation of a small trend

The question is whether it will grow into a medium trend

Opposite-direction logic tends to fail

There must always be a proper-direction logic

Because eventually it will move toward the proper direction

Consider which direction is currently correct

In range markets, the opposite direction is the correct direction

And in trending markets, the correct direction is the correct direction

The best thing is simply to know which way it is heading now

With a proper-direction logic, in range markets you relentlessly pursue the correct direction with contrarian trades

Profit-taking is in the small range and the medium trend

In large trends, the probability of success is inherently low

Entering with one shot and then increasing the position only increases risk

Increasing is for profit-taking in the medium trend, a temporary high/low aiming strategy

A high/low is

Other than fractals and envelopes, there is nothing else to estimate

MA is at the 50 level as an oscillator, so estimating it would be intrusive

Envelopes are at positions like 60 or 40 as oscillators

For understanding market conditions, that is an analysis

Fractals are only support/resistance

Other market conditions are just gauging the strength of the moving average as envelope

The average market value should be just one; if there are multiple, it’s noise

Markets are such that

Even if the fractal does not function,

Ultimately, a market where fractals function will be established

Because Dow Theory is equivalent to “appearing at all times”

In the end, Dow Theory becomes valid = fractals function

While watching the average market value, you should supplement the current direction

Trading with fractals and Dow Theory is the true market analysis and technical analysis

I believe that

Noise is natural, but Dow Theory being valid is natural

Therefore, this fractal and envelope market analysis is extraordinarily effective in technical analysis

Market analysis exists simply to recognize what the true direction of the market is

If the market is not absolute, strengthening the recognition of the correct direction is what converts into profit