When I first entered this circle, I was also glued to that wildly fluctuating K-line every day, feeling like it could tell me everything. What was the result? I repeatedly got cut, and my account became leaner and leaner. Later, I realized that what I was looking at was fundamentally different from what the experts were seeing — they weren't looking at whether it was 'up or down', but rather what the guy behind the price, called the 'big player', was really planning.
Today I'm going to talk about three patterns that I use most often in practice, which are also the 'signals' that the big players fear you understanding. Once you master them, you can avoid at least 80% of the pitfalls.
1. False Breakout: The most annoying 'fishing line'
You must have encountered this: the price suddenly breaks through the previous high, and you excitedly jump in, only for it to instantly drop back, trapping you solidly. This is the classic 'false breakout', specifically designed to catch those chasing highs.
How to see through it? Remember two key points:
Insufficient volume, all just a bluff: A real breakout requires the trading volume to be at least twice the average of the previous few days to confirm. A rise on low volume is likely just a trick.
Time validation: After the breakout, there must be at least two 4-hour candlesticks standing firmly above the resistance level to be considered temporarily safe. If it just touches and falls down, that's a test, not an all-out attack.
2. Hidden accumulation: The moment when the big players secretly stock up.
Big players are not gods; they will leave traces when buying. The price may not have moved much, but you might have already missed the signal to build a position.
Focus on these two combinations:
"Long lower shadow" + "low volume reversal": The price is pushed down but quickly pulled back by strong buying power, leaving a long lower shadow. In the following days, the trading volume decreases, but the price slowly recovers its ground. This often indicates that someone is quietly accumulating at a low level.
"Long-term consolidation" + "sudden volume surge bullish candle": After a long time grinding in a range, when everyone is out of patience, a clearly increased large bullish candle suddenly rises from the ground. This is usually the last shout before the rally starts.
3. Death reversal: The red light for escaping at the top.
The scariest thing is not the drop, but that you are completely unaware before it happens. There are two classic 'death knell' patterns that require high vigilance when seen:
Hanging man: A candlestick with a long upper shadow (or a very small body), closing at a low point of the day. It’s like a person jumping to reach a height but crashing heavily to the ground, indicating that the bullish force is exhausted.
Evening star: Composed of three candlesticks—first a large bullish candle, then a small fluctuating, indecisive doji (or small candlestick), and finally a large bearish candle that completely engulfs it. This is a textbook signal of a trend reversal.
Finally, let's talk about something practical:
These patterns are not a crystal ball to predict the future, but a 'thermometer' to help you understand the current balance of power between bulls and bears in the market. It cannot guarantee that you are 100% correct, but it can greatly improve your win rate and help you avoid obvious traps.
Making money in the market is never about who is smarter, but about who is more clear-headed and disciplined. When you can understand these basic 'codes', you have already left behind those players who only watch the price's red and green fluctuations.
The true wealth code is hidden in these structures that the market has repeated thousands of times. The rest is up to your execution power and mindset.
