波动几何

Core Basics of Simplified Trading and Volatility Geometry - Author: Wang Jiao Cheng#

Core Basics of Simplified Trading:#

Technical analysis identifies entry points, strategies determine profits and losses, mindset ensures execution, and rules are comprehensive.

Stock Selection: Nine States (Law of Alternating Rise and Fall), Nine Changes (Law of Conversion Delay), and Nine Components (Law of Angle Balance).#

Timing: Regions, Lines, and Intraday.#

Strategy: Accepting Losses, Reward-Risk Ratio, and Win Rate.#

Operations: Trend Following, Stop Loss, and Light Positioning.#

Mindset: Greed and Fear have no right or wrong; correct timing is right, incorrect timing is wrong; Impatience, Hesitation, Gambling, and Guessing.#

Technique: Prices rise and fall; complete short movements to act in the long direction (enter), change immediately and exit (stop loss), then change and exit afterwards (take profit).#

Laws: Three Major Laws of Price Movement (Law of Alternating Rise and Fall, Law of Conversion Delay, Law of Angle Balance)#

Volatility Geometry:#

Assumptions:#

1. Movement can only occur in the first quadrant where both x and y axes are positive;
2. Trajectories can only extend upwards and downwards to the right, not to the left.

Definitions:#

1. Left is prohibited movement;
2. Right is constant movement;
3. Up and down are uncertain movements;
4. Right-up overlap is positive basic movement;
5. Right-down overlap is negative basic movement.

Axioms:#

1. Directional movement of volatility only exists in positive and negative basic movements;
2. Positive and negative basic movements alternate;
3. Positive and negative basic movements are multi-layered fractals.

Inferences:#

1. If adjacent positive basic equals negative basic, it forms horizontal rectangular movement, fractal is positive-negative-positive + negative-positive-negative, positive-negative-positive-negative-positive + negative-positive-negative-positive-negative;
2. If adjacent positive basic is greater than negative basic, it forms upward displacement movement, fractal is positive-negative-positive-negative-positive + negative-positive-negative;
3. If adjacent negative basic is greater than positive basic, it forms downward displacement movement, fractal is negative-positive-negative-positive-negative + positive-negative-positive;
4. Because basic movements alternate and are fractal, basic movement fractals are: positive-negative-positive, negative-positive-negative, positive-negative-positive-negative-positive, negative-positive-negative-positive-negative;
5. When basic movements alternate, the tail movement of the front fractal is opposite to the head movement of the back fractal;
6. Basic movement fractals can only be in three-replacement or five-replacement patterns, three-replacement patterns achieve basic directional movement, five-replacement patterns achieve strong basic directional movement, distinguishing positive and negative basic movements into driving movements and adjusting movements.

Definitions:#

1. Fractal basic movements: positive-negative-positive, negative-positive-negative, positive-negative-positive-negative-positive, negative-positive-negative-positive-negative;
2. Positive three-replacement movement: positive-negative-positive;
3. Negative three-replacement movement: negative-positive-negative;
4. Positive five-replacement movement: positive-negative-positive-negative-positive;
5. Negative five-replacement movement: negative-positive-negative-positive-negative;
6. Adjusting movement: positive-negative-positive, negative-positive-negative;
7. Driving movement: positive-negative-positive-negative-positive, negative-positive-negative-positive-negative.

Axioms:#

1. Connecting alternating points of basic movements into lines, driving movements can only form upward (positive-negative-positive-negative-positive) or downward (negative-positive-negative-positive-negative) slanted rectangular triangles (the triangle's sharp angle aligns with the driving direction);
2. Connecting alternating points of basic movements into lines, adjusting movements can form upward (positive-negative-positive) or downward (negative-positive-negative) parallelograms, horizontal rectangles, and horizontal triangles (the triangle's sharp angle can face either side).

Definitions:#

1. Driving rectangle is rectangular driving;
2. Driving triangle is triangular driving;
3. Adjusting parallelogram is parallel adjustment;
4. Adjusting rectangle is rectangular adjustment;
5. Adjusting triangle is triangular adjustment.

Inferences:#

1. In higher-level adjustments, fractal driving requires appropriate amplitude to produce rectangular driving, smaller amplitude for triangular driving, and larger amplitude for extended driving;
   Extended driving replaces the tail movement of rectangular driving with rectangular or triangular driving, and the tail movement of triangular driving with triangular driving;
   Extended driving can be rectangular or triangular, depending on the amplitude needs of fractal driving in higher-level adjustments.
2. In higher-level driving, fractal adjustments require appropriate amplitude to produce rectangular adjustments, smaller amplitude for triangular adjustments, and larger amplitude for parallel adjustments;
   If the amplitude of parallel adjustments is still insufficient, additional rectangular or triangular adjustments must be made; if additional rectangular adjustments are still insufficient, further triangular adjustments must be added;
   The role of rectangular and triangular adjustments is merely to delay time, waiting for rightward movement to reach the edge of the figure in higher-level driving;
   Adjustments with additional adjustments are joint adjustments, and the additional process requires a three-replacement movement for connection.
3. Parallel adjustments cannot form triangles from three-replacement movements;
4. Triangular adjustments are an extended mode of delaying time for rectangular adjustments.
5. Driving movements only exist as rectangular driving, triangular driving, and extended driving;
6. Adjusting movements only exist as parallel adjustments, rectangular adjustments, triangular adjustments, and joint adjustments.

Methods:#

1. Driving movements only need to connect the tops and bottoms to form rectangles or triangles, predicting that internal fractal adjustments will inevitably end on the line;
   If it does not reach the line or breaks the line, it indicates acceleration or deceleration strengthening or weakening, and this figure ends and enters the formation of another figure, allowing for reconnection to continue prediction;
2. Adjusting movements only need to connect the tops and bottoms to form parallelograms, rectangles, and triangles, combining higher-level driving patterns for connection, predicting that higher-level adjustments will inevitably end on the line;
   If it does not reach the line or breaks the line, it indicates acceleration or deceleration strengthening or weakening, and this figure ends and enters the formation of another figure, allowing for reconnection to continue prediction.

Definitions:#

1. Acceleration: The slope of the figure increases, dividing into up and down;
2. Deceleration: The slope of the figure decreases, dividing into up and down;
3. Strengthening: The interval of the figure decreases, dividing into up and down;
4. Weakening: The interval of the figure increases, dividing into up and down;
5. Unchanged: The slope interval of the figure remains unchanged.

Inferences:#

1. Acceleration, deceleration, strengthening, and weakening occur in the new driving movement after the adjustment movement ends relative to the old driving movement;
2. Driving movements are five-replacement movements that will undergo two changes divided into three stages, adjusting movements are three-replacement movements that will undergo one change divided into two stages;
3. If the first stage has a high slope, then the second stage has a medium slope, and the third stage has a low slope;
4. If the first stage has a low slope, then the second stage has a medium slope, and the third stage has a high slope;
5. If the first stage has a medium slope, then the second stage can have a high slope, low slope, or medium slope, and the third stage has a medium slope.
6. If it is an adjusting movement, there is no third stage.

Definitions:#

1. Decreasing components: high, medium, low slope, dividing into up and down;
2. Increasing components: low, medium, high slope, dividing into up and down;
3. Increasing-decreasing components: medium, high, low slope, dividing into up and down;
4. Decreasing-increasing components: medium, low, high slope, dividing into up and down;
5. Unchanged components: medium, medium, medium.

Methods: Based on the slope of the previous stage, predict the slope of the next stage, anticipate changes, and predict the shape of the next stage, combining with higher levels for prediction.#

Axiom: The strength of movement affects the clarity of volatility fractals at different levels.#

Definitions: The three adjacent levels are 1. High level as trend; 2. Medium level as wave; 3. Low level as momentum.#

Axiom: Trend, wave, and momentum combine into nine states of volatility due to different combinations of movement strength.#