The so-called form is essentially a process of repeatedly competing for bands in a certain interval. Before the end of this process, multi-space competition is not a winner, but the closer it is to the end, the clearer the winner will be. Once the winner is decided, the trend will inevitably unfold. From this, we can easily draw the following conclusions:

First, there is a pattern first, then a trend. Without patterns, there is no trend. There is no one-sided trend from beginning to end. It is important to understand this. It is extremely important to observe and judge the opportunities and opportunities in the futures market according to this idea.

Second, the form of great value is not so easy to form and break through. It is valuable because both sides have invested a lot of troops and fought repeatedly for a long time, and no one wants to give in easily. So it is not easy to break through, but once it breaks through, the value will be great, because the subsequent trend movement is amazing, which is the general trend and beyond human power.

Third, once a breakthrough is made, it indicates that one side will win and the other side will be defeated. This means that there will be a trend after the form, a big trend after the big form, a small trend after the small form and a medium trend after the middle form. Once the trend is unfolded, it will not be easy to end without releasing energy, and a new form is gradually taking shape.

Fourth, the trend originates from the form, which is the mother, foundation and premise of the trend. Therefore, the starting point of our thinking on trend research and observation is undoubtedly the form, not the trend, not the local price performance, so our trading solution should also proceed from the form, based on the form, and we can foresee the direction, level, strength and so on from the form before the trend unfolds. That is to say, the direction, level, strength and so on of the trend have been determined before the trend is formed and unfolded, so once the pattern breaks through, you don't have to care about and re-judge the direction, size and strength of the trend, and it is useless to care about it. After re-judging, there will be no new correct information and further favorable results. On the contrary, re-judgment shows that you have no confidence in the trend. How to hold or open a position without confidence? Many traders fail because the starting point of thinking is wrong, and they like to decide buying and selling from the local performance of the trend. If the local performance is good, they will chase after it, otherwise they will chase after it. But we believe that if the starting point of thinking is wrong, it is impossible to draw a correct conclusion. The correct trading decision has been determined from the beginning of the trend. It is very passive to make decisions in the process of trend development, because the winning main force has already made a certain profit, he can bear the price oscillation caused by floating profit and still maintain a good attitude, but you can't, because you have no floating profit advantage. Once you encounter an oscillation, your attitude cannot be unaffected. Once you hit the stop loss level, it is impossible not to stop loss. In addition, many investors will have no confidence in the trend because the band amplitude in the form is too small and the band profit has been narrowed again and again. So even if he suddenly catches the form, he will leave as soon as he encounters obstacles. When he encounters a bigger rebound or callback, he will doubt the trend and re-demonstrate. The result is always a small-band light warehouse operation, making a little money to run away. Once the rhythm is bad, he will not only make a small loss, but also make a profit as a whole.

Fifth, the trend will advance rapidly only after the breakthrough of the form. Without a breakthrough, there will be no rapid progress. Without rapid progress, the results are still unpredictable. Without rapid progress, it is not easy to hold positions, and there is no confidence and foundation to increase positions. However, in some cases, after the morphological breakthrough, it will not be carried out smoothly immediately, but will be tested or sorted out for one or several days. At this time, it is most likely that you will lose your position after dawn or have no confidence to increase your position; Then, rapid progress appeared, and the price was far away from the pattern again, but investors pursued it with confidence. As a result, the position in the plate was passive for a time, which led to the continuous rush in and out of the trend. In the end, even with the pattern and trend, no money was made. In short, the huge influence of form on investors' trading mentality is not only manifested in form, but also in the trend after the form breakthrough. Only by overcoming this psychological constraint can we truly enter the ranks of morphological traders and homeopathic traders.

After the pattern breakthrough, it is the only correct choice to hold a position without a stop loss. Remember, opportunities are waiting, profits are covered up, not robbed, and robbed can't make a fortune. If you have no confidence in the trend, it is useless to grab it. On the contrary, if you have confidence in the trend, you don't need to grab it. It should be said that confidence and trading techniques have been determined before the form breakthrough. Rushing in and out is not only harmful, but also always makes your position mentality in an unstable state. Whether it is profit or loss, you are always troubled by the trend of waste.

What if there is no form? As we said before, there is no one-sided trend from beginning to end. A one-day reversal without a head shape or a bottom shape only exists in a state of extreme price imbalance. Even if it is a one-day reversal, it just doesn't mean that it has no relay form, and even a one-day reversal without relay form is rare. Therefore, it is not difficult to judge whether there is a condition of one-day reversal. Therefore, we believe that if there is no one-day reversal condition and no reversal pattern, please continue to hold positions according to the original trend until the trend accelerates. There is no tendency not to accelerate.

Does the form and trend determine the trend or does the trend determine the form?

There is no form without breakthrough. The relationship between supply and demand is always difficult to balance. Equilibrium does not exist, and imbalance is the normal state. Therefore, there is no form of non-breakthrough, and the breakthrough of form is only a matter of time.

Knowing and fully understanding and accepting the relationship between patterns and trends and their laws does not mean that you can make money with them, because there are many interferences, mainly manifested in:

First, the band range in the form is too small, and the narrow profit will deeply affect your profit expectation and position mentality, including the trend expansion process after the form breakthrough.

Second, you always hear a lot of serious bad news in the bottom pattern area and a lot of serious bullish news in the top region, which will inevitably affect your confidence in the pattern and its subsequent trend, including your confidence in holding positions.

Third, the development of the trend, especially in the initial stage, is not always smooth, and the mentality of holding positions will always be tested.

Fourth, some forms are quite difficult to grasp. For example, the shape of the double bottom is often determined afterwards, and it cannot be completely determined in advance.

Fifth, before and after the morphological breakthrough, it conflicts with some technical indicators or analysis methods. Do you still have confidence in morphology and its breakthrough? Can the mentality of holding positions be unaffected?

Sixth, although there are not many false breakthroughs in morphology, once they occur, there is not much difference between the initial test after the breakthrough and the normal test, which is quite difficult to deal with. Do you still have confidence in morphology and its breakthrough if one or several improper treatments lead to losses or lost opportunities?

Seventh, when the form conflicts with some authoritative judgments, are you still full of confidence and persistence in the form and its breakthrough?

Eighth, when the form breaks through, the ups and downs have been very large. Do you dare to chase? Aren't you afraid of a false breakthrough if you dare to chase?

Ninth, after the morphological breakthrough, do you still believe that the breakthrough is effective if the test is strong?

Tenth, when you miss the opportunity to open a position, do you give up or forcibly intervene?

Eleventh, some forms are very hidden and not very symmetrical. Can you find them in time? This situation is not uncommon, nor is it all. It often appears in a mixed way, which increases the difficulty of judging and holding positions. Are you still full of confidence in the form and its breakthrough? These are all factors that cannot be ignored.

Re-discussion on "Form Determines Trend"

The article "Shape Determines Trend" that I read in the Futures Daily on July 8th has aroused widespread concern in the market and caused various controversies. The point is, in the final analysis, does the form determine the trend or does the trend determine the form? The author believes that this is neither a logical question of "chicken or egg" nor a philosophical world view question of who decides who between thinking and existence. It is just one of the basic laws of many price behaviors in the market category.

The basic law of price behavior is the golden key for us to know the real price information and get the decision-making opportunity. Master Gann's theory is somewhat abstruse, and only the master himself can really use it well; Although master Eliot's wave theory is not so profound, its wave has the conclusion of wave cycle, which often leads to great deviation in actual combat and uncertain decision-making. I am just a pawn in the market, and I dare not and have no intention to compare with the masters, just because after studying these masterpieces repeatedly, I still can't convince myself to believe many conclusions and solve many puzzles and confusions in actual combat. In addition to the two masters, there are a large number of research books on price behavior in the market, and there are many schools, but it is puzzling why the 28 rule still exists not only at home but also abroad. Why are many battle-hardened masters (including institutions and individuals) often repaired by the market? I dare not pretend that the basic law of price behavior can change or reverse the 28 th law, but I believe that as long as you really master the basic law of price behavior, it is not difficult to become a minority. The author is cautious first, then bold, and never dares to parrot what he can convince himself. This character forces him to learn what he can convince himself, and to explore what has not been excavated in this market, that is, the basic law of price behavior. After a thorough study of the basic laws of price behavior, the author finds that there is basically no further progress in the world except for Soros and David Livermore, which is quite regrettable (Dow theory can also be said to talk about price behavior, but it is too broad, and there is no further concrete thing except the classification of price behavior).

However, price is the only object for all of us to trade, and the purpose of all the research is to get the potential price trend. However, the author finds that many research results about the potential price trend come from the external factors or skills of the price itself, not from the price behavior itself. In other words, your research results do not come from the full face-to-face dialogue with the market price. But from subjective empirical speculation, theoretical rigidity or conformity far from market prices. There are problems in the derivation of these research results, which can not be called effective research at all, let alone the seamless connection between effective research and actual combat transactions. Without effective research, it is impossible to guide the actual transaction, and there is no seamless connection between effective research and actual transaction, which is not very helpful to the actual transaction.

Gann theory is too abstruse, wave theory is too flexible and metaphysical, Japanese candle chart technology is too empirical, fundamental analysis is too backward and too far away from price behavior itself, and technical analysis other than price behavior, such as indicators, is too subjective and peripheral. The author points out their shortcomings, not to belittle them, not to raise themselves, nor to emphasize the correctness of their views, but to remind everyone to face up to these shortcomings in actual combat and not to be superstitious about authority. It is useful in the speculative market. I don't deny the reasonable ingredients, but I should also learn from them. Just don't expect its authority and complete plagiarism to achieve profit from the market. This kind of thing has never happened before, and it will never happen now and in the future.

A person who has been engaged in futures market research for more than ten years must be unwilling to give up and take something from the existing research results in the market. Among them, financial guru Soros's reflection theory and David Livermore's view that "prices always run along the path of least resistance" have benefited the author a lot. The reflection theory makes me understand the internal relationship between supply and demand (fundamentals), people's expectations and price behavior, which not only helps me eliminate the interference of wrong analysis methods, but also makes me more convinced that "form determines trend" rather than "trend determines form".

The relationship between supply and demand is also called contradiction between supply and demand. On the surface, it is the smallest and calmest reflection of the contradiction between supply and demand. In fact, it is a process in which the contradiction between supply and demand is gradually accumulating and the differences between long and short expectations are growing. The trend is that long and short will resolve or adjust the huge contradiction between supply and demand accumulated in form through the continuous rise or fall of prices. This is a reflection of the relationship between supply and demand and price behavior. Failure to understand this reflective relationship will lead to the decoupling of the contradiction between supply and demand and price behavior, the former being the former and the latter being the latter. In fact, there is a profound reflective relationship between the two.

As we all know, a volcano will erupt only when its energy accumulates to a certain extent, otherwise it will be an extinct volcano. In the speculative market, energy is accumulated first and then released. Without accumulation, there is no release, and accumulation determines release. Form is the process of market energy accumulation, and trend is the process of energy gradual release, so there is a form first and then a trend. Without form, there is no trend. Unless the price is in a state of serious imbalance, it is only the original kinetic energy of the trend of form accumulation, and the price is seriously unbalanced. For example, if the price accelerates sharply, it is only the accumulated reverse potential energy. Both kinetic energy and potential energy follow the basic laws of energy accumulation and release, which is both a physical process and a reflection law. Soros's reflection theory allows us to determine the internal relationship between form and trend. However, how to interpret the key information contained in the table is far from enough or even impossible.

David Livermore's "price always runs along the path of least resistance" makes us understand how to observe and analyze the trend of minimum resistance of the form, whether the minimum resistance has arrived, and whether the form is facing a breakthrough. Using this basic law, the author has achieved quite ideal results in the recent research and actual combat of palm oil and gelatin, especially gelatin is exciting. Before this round of rebound, Hujiao moved in the form of a box, evolved from a rising triangle, and then turned into a straight platform in the later stage of the box, in which turning into a straight platform was a qualitative leap. The author immediately asked the market to pay attention to this several times. The emergence of a straight platform on the central axis of the box is not only a sign that the box movement is coming to an end, but also a sign that the bulls are about to launch an attack. For me, the importance and reliability of this information is far higher than the fundamentals at that time. At that time, the fundamentals were not as good as car trade-in and heavy rain in Thailand, only worse than seasonal pressure expectations and tire anti-dumping against China. At the same time, international stock markets and commodities are also plummeting. Therefore, if we infer from the severe external environment, it is easy to draw the conclusion that Hujiao is bearish in the market outlook, and many related articles are written like this. The final result proves that the situation is completely opposite. So where are they wrong? The author believes that there are three main aspects. First, many people's research models and deduction logic mentioned above are incorrect, and correct information cannot be obtained from the mutual reflection of supply and demand (including fundamentals), people's expectations and price behavior. If they can't do this, the reliability of their conclusions is very doubtful. The second is to stay away from the powerful influence of China's rise. After all, Hujiao is not a "shadow glue" but a market with considerable pricing power; Third, away from the key information (form) of price behavior itself, away from the center of price behavior, it is easy to make mistakes, but unable to correct them.

Does the form and trend determine the trend or does the trend determine the form?

In short, it is impossible to draw a correct conclusion simply by listing the well-known fundamental factors to infer the future of price behavior, which is precisely the common problem that most people have not noticed. People grow up with mistakes, and everyone has made such mistakes. It depends on who can notice this terrible mistake, and finally get out of it, return to effective research, and realize seamless connection with the actual transaction.

In this market, we are neither a multi-party nor an empty party, but a third-party member who tries to stand on the winning side. Therefore, any individual's views and even trading actions are not important and will not have a substantial impact on the market. Trends that have been determined by form will not change because of your right or wrong views or participation. In fact, only if your views and trading behaviors conform to the basic laws of price behavior will you realize the hero of the times, otherwise you will still be the original you!