Lately, I have been studying Chanlun and found that it indeed restores the most essential aspects of the capital market—human greed and fear, which leave no place to hide here.

Honestly, when I first came into contact with Chanlun, I was a bit confused, but after gradually understanding it, I realized why this theory is so powerful. The core logic of Chanlun is actually very simple: through a set of strict rules, it encodes and deconstructs seemingly chaotic market trends. It’s like labeling every fluctuation in the market, allowing you to clearly see where the buy and sell points are.

I think the most ingenious part of Chanlun is the concept that “the trend will ultimately be perfect.” Whether it’s an uptrend, downtrend, or consolidation, the trend will eventually run its course, and the end of an upward move inevitably marks the beginning of a downward move. This gives us a clear signal—that when a downtrend ends, it’s the best entry point. The reverse is also true.

To truly master Chanlun trading, you need to understand several key elements. First is the central zone, which is composed of at least three consecutive secondary trend types overlapping. Then there are trend types, divided into trending and consolidating. Lastly, there are levels, which might be the most overlooked but also the most critical issue. Without levels, there is no direction; larger levels determine the main trend, while smaller levels handle the details.

Divergence is the only basis for judging trend reversals. High-level divergence signals a sell, low-level divergence signals a buy—that’s the core operational logic in Chanlun. But be careful, divergence isn’t as simple as looking at MACD green and red bars; it also needs to be confirmed with yellow and white lines, moving averages, fractals, and other dimensions. I’ve found that many people only look at a single indicator, which leads to the lament: “It’s diverged again and again, but the trend still runs.”

Regarding the strength of moving average trends, the crossover of the 5-day and 10-day moving averages forms a buy-sell system. When the female (short-term) is above, it indicates a bull market; when the male (long-term) is above, it indicates a bear market. After they intertwine, it may form a continuation or reversal. This logic is very effective, especially when combined with fractal judgment.

Fractals are another important tool in Chanlun, composed of three consecutive candlesticks. In a bottom fractal, the high and low points of the middle candlestick are the lowest; in a top fractal, they are the highest. Fractals are divided into intermediate and standard types, distinguished by whether they generate a new stroke. Here’s a tip: if the smaller-level trend shows consolidation divergence after the second buy or sell point, with a mild correction, it’s likely to form an intermediate fractal; otherwise, it may extend into a new stroke.

When trading, I prefer to use multiple level structures to reduce risk. For example, short-term trading uses a three-tier structure of 5-minute, 30-minute, and daily charts, which helps to see the risk levels more clearly. The status of the daily and weekly charts directly determines whether I participate.

The brilliance of Chanlun lies in building trading on a rigorous logical system rather than on greed and fear speculation. Once you truly understand the core concepts of levels, central zones, and divergence, market trends become precisely locatable. Recently, I’ve also been paying attention to some trading pairs on Gate, applying this theory to actual operations, which indeed helps reduce costs and improve win rates. If you’re interested, you can study the complete system of Chanlun yourself—its value far exceeds your initial expectations.