Recently, I've been reading discussions among traders about technical analysis and found that many people still have misconceptions about high and low points. Actually, what truly determines whether you can make money is not any single pattern, but the sequence in which these patterns appear.

I'll start with the most basic concepts. HL stands for higher low, meaning the bottom is higher than the previous bottom. This sounds simple, but it is extremely critical in practice. When you see bottoms constantly rising, what does that indicate? It shows that buyers are in control, and selling pressure can't push the price down.

The counterpart is HH, which means higher high—the top is higher. When these two appear together, with HH and HL combined, they form a very healthy upward trend. From my trading experience, when I see this pattern repeatedly, I don't need to think too much—just keep buying on pullbacks.

The reverse logic is the same. LL is lower low, meaning the bottom is lower. LH is lower high—the top is lower. When you see LL and LH alternating, that is a clear signal of a downtrend. At this point, you should short at the LH level and avoid buying against the trend.

Here's the key point. Whether HL is important or not doesn't matter; what matters is the sequence in which these patterns appear. If you see a cycle of HH, then HL, then HH, then HL again, that indicates a very strong upward trend. Conversely, if you see LH, then LL, then LH, then LL, that indicates a strong downward trend.

What is the most dangerous situation? It’s a sign of trend reversal. For example, in a rising market, if suddenly an LH appears, followed by an LL, you should be alert. Similarly, if a market is falling and the bottom suddenly starts rising to form an HL, that could be the beginning of a reversal.

In practical application, my method is very simple. First, confirm what the main trend of the market is, then only trade in that direction. During an uptrend, buy at HL levels, with stop-loss below the new bottom. During a downtrend, short at LH levels, with stop-loss above the previous top.

Finally, I want to say that these patterns themselves are not magical, but once you truly understand what rising bottoms or falling tops represent, you can anticipate market direction changes in advance. This is more useful than any indicator. You can apply this logic to ETH and other mainstream cryptocurrencies, and it’s worth practicing yourself.