I get asked every day: 'Teacher, how can I accurately assess support and resistance? What should I do if my entry point always lands halfway up the mountain?' Honestly, I've seen too many people getting headaches from calculating complex indicators, only to be ground down by the market. In fact, my transition from losing trades to stable profits doesn't rely on any esoteric techniques, just 6 'stubborn detail-oriented' simple methods, which I will explain thoroughly to you today!
Step 1: Filter stocks from the 'active list', rejecting 'zombie candidates'.
Every day, spend 10 minutes at the opening to look at the涨幅榜 (rising list), only selecting stocks that have had 'notable fluctuations' in the past half month — meaning those with clear upward trends added to your watchlist. To be honest, those 'zombie stocks' that have been stagnant for years, not even creating a splash, won't produce any market movement no matter how long you watch them. Stocks with a history of price increases have a built-in 'popularity base', just like the classmates who love to speak up in class; they are definitely more likely to raise their hands next time. This step directly helps you filter out 80% of ineffective stocks.
Step two: Stick to the monthly MACD golden cross, don't go against the trend.
I never put a full screen of indicators on my desk; I only focus on one: the MACD golden cross on the monthly chart. Many beginners love to 'catch the bottom for a rebound', thinking that if it has dropped a lot, it must go up, but they end up getting trapped more and more. This is purely a gambler's mentality! The monthly golden cross is the signal for 'establishing a trend', just like trees sprout when spring arrives; this big direction is unmistakable. Following the assets with the golden cross is like catching a ride on a tailwind; although slow, it is steady. Going against the trend is like colliding with a train; it would be a miracle not to crash.
Step three: Wait for the daily chart to 'increase volume' when it retraces to the 60-day line, do not be greedy for 'low price traps'.
I completely ignore the 5-day and 10-day lines on the daily chart and wait for one signal: the price retraces to near the 60-day line with a sudden increase in volume. Why wait for volume? Because the 60-day line is the 'consensus line' for most funds. A decrease in volume during a retracement indicates that no one is buying, so it is highly likely to drop further; an increase in volume is the 'true support', proving that there is capital rushing to buy at this position. Don't be like those who are greedy for cheap prices, insisting on picking up so-called 'low prices' below the 60-day line; there are more people buried there than the meals you have eaten, and the risk is maximized.
Step four: Don't be 'sentimental' about your position; as soon as the signal is broken, leave immediately.
Once I enter the market, there’s one principle: hold as long as the key support line is not broken; if it breaks, run immediately without hesitation. I’ve seen too many people turn profits into losses, all because they fell for the luck of 'just wait a bit longer'—'What if it rebounds?' 'I’ll sell it tomorrow', and the result is a deep trap. The market won’t have feelings for you; when it’s time to take profits or cut losses, you have to be decisive like breaking up with a bad boyfriend; dragging it out will only lead to worse losses.
Step five: Take profits in batches, don't think about 'eating the whole fish'.
My profit-taking rule: When profits reach 30%, sell half; when it hits 50%, liquidate the remaining position. Some say, 'That's too conservative, you could clearly earn more', but think about it: the market never leaves all the profits to one person. It's like eating fish; if you have to munch on both the head and tail, you can easily get caught by the bones. Small profits accumulate over time, and at the end of the year, I earn more than those 'gamblers' chasing highs and lows. Long-term profitability is the way to go.
Step six: Stop loss as soon as it breaks the 60-day line; this rule has saved me countless times.
This is my ultimate survival rule: No matter if you just bought it for a day or held it for a week, as soon as the price falls below the 60-day moving average, regardless of profit or loss, leave immediately without hesitation. I once had an asset that dropped below the 60-day line the day after I bought it; I gritted my teeth and sold it, and later it dropped 40%. I still feel scared thinking about it. This rule is like a car seatbelt; it seems bothersome in daily life but can save your life in critical moments.
Some say this method is too mechanical and lacks 'operational feel', but I want to say: the more emotional people are in the market, the faster they fall. These 6 steps are not magical; what’s truly difficult is the unwavering execution—being able to hold back from entering when you should wait and being able to decisively cut losses when it’s time to sell. I’ve made consistent profits for 3 years using these 6 simple methods, not because I’m amazing, but because I can 'control my hands and follow the rules' better than others.
Next time, I'll break down 'how to judge false breakthroughs' for you. Many people fall into this trap and lose tens of thousands in tuition fees unnecessarily. Follow me, and I'll show you how to make the most stable money using the simplest methods. See you next time!
