I reorganized Chan Theory once again, and suddenly I felt a sense of sudden clarity. Put simply, this theory turns the market’s chaos into orderly game rules, so that you can clearly see what the market is really doing.

The most essential thing can be summed up in a single sentence: the trend will ultimately be perfect. What does that mean? It means that any trend—whether it’s rising, falling, or consolidating—will ultimately complete, and the way it completes can be precisely identified. This is not mysticism; it is derived from a rigorous rule-based system through pattern types, strokes, line segments, central zones, and so on.

I think the most powerful part of Chan Theory is that it completely exposes human greed and fear. Market fluctuations may seem random, but in fact, every turning point has signs you can follow. If you just master these three key points—central zones, trend types, and levels—and then combine them with divergence as a judgment tool, you can basically seize buy and sell points. It’s not that you can win every time; it’s that risk is controllable and there is evidence behind it.

At the operational level, the most practical logic for me is this: divergence at low levels is a buy point, while divergence at high levels is a sell point. But the prerequisite is that you first need to figure out what level the trend is at—whether it’s a trend or a consolidation. Many people ignore this issue of level. As a result, when a large-level move is heading downward, they still trade frequently within small levels, and in the end they lose all their chips. What Chan Theory emphasizes is to follow the direction of the large level, using small levels to optimize costs, rather than taking the opposite side.

I studied the pattern types section for a while and found that the key is to judge whether they are relay types or standard types. If, after a pattern type, a consolidation divergence appears, the adjustment is usually not very strong—this is often a relay. If there is no consolidation divergence, the adjustment is strong, and it will basically form a new stroke. At this point, pairing it with the 5-day moving average to assist judgment can significantly improve accuracy.

Another especially important factor is risk rating across multiple levels. For example, the combination of the daily and weekly chart states directly determines how much operational risk you face. If both the daily and weekly are in a downtrend (in Chan Theory’s language, the [-1,1] state), this is the most dangerous situation, and even the strongest experts should watch from the sidelines. Conversely, if both are in an uptrend ([1,1] state), then this is the safest trading environment.

To be honest, Chan Theory is not a tool for getting rich quickly. It’s a methodology that helps you last longer in the market and earn more steadily. It builds trading on a strict foundation of rules, not on hunches or emotions. This is the true meaning of “worrying without worry”—it’s not that there is no risk, but that risk is managed through scientific classification. That’s also why I think spending time understanding the logical framework of Chan Theory is far more worthwhile than blindly chasing rallies and selling in panic.