Recently, I’ve been pondering a question: why do so many people lose money in short-term trading, yet some can still achieve consistent profits? I believe the key isn’t how many indicators you’ve learned, but whether you truly understand the essence of short-term trading.

Short-term trading, simply put, is buying and selling within a relatively short period to profit from price fluctuations. Some complete trades within a day, others hold positions for several days. But regardless of the approach, the core is the same: finding the right entry and exit points. I’ve found that many people overcomplicate short-term trading; in essence, the skill boils down to three words—trend following.

The easiest opportunities to make money in the market often appear in the main trend segments. During these times, the price movement is large, lasts long enough, and is easier to identify. Of course, there are also opportunities with moderate volatility that occur frequently; it depends on whether you can keep the rhythm. But I must be honest—those markets with extremely intense fluctuations also carry exponentially higher risks. Without sufficient technical skills, it’s easy to get wiped out.

My experience is that those who can truly apply short-term techniques are often those who have solid basic skills. First, look at the moving averages, one of the most commonly used indicators in the market. When the price is above the moving average, it indicates a bullish trend; below, it indicates a bearish trend. It’s simple. But simple things are often the easiest to overlook.

Next, understand market cycles. The market never moves in a straight line. The typical rhythm is: first, range-bound oscillation, with bulls and bears battling within a zone. Then, a sudden breakout occurs, transforming the fluctuation into a clear upward or downward trend. After that comes a correction phase, where the price begins to fall back. Finally, enters an uncertain period, during which it’s best to stay away from the market.

I’ve reviewed many traders’ logs and found a common point: they are always tempted by news and rumors. But the truth is, by the time you see financial news, the market has already reacted. So, real short-term skills still rely on technical analysis. You need to identify support and resistance levels, then operate within the range or follow the trend to go long or short.

Regarding stock selection, the secret to short-term trading lies in turnover rate and volatility. You need to find stocks with themes, high trading volume, and significant price swings. These stocks usually appear during intense market volatility or when major news is released. Fundamentals don’t matter much because short-term trading allows for both long and short positions.

I’ve summarized a few practical tips for short-term operations. First, when the stock price just starts to rise, with a small increase, and the moving averages are diverging upward into a bullish alignment, with a daily turnover rate around 3%, it’s time to wait for the right moment. Once the price pulls back to the 5-day moving average, buy immediately. Many have used this short-term technique with decent success.

Second, if the overall market is declining but certain stocks are rising more than 5% against the trend, with increased volume, these stocks have great short-term potential. You can buy at the close of the day or during a pullback the next day. This is called “not falling when it should, but rising instead.”

Another scenario: stocks that surge rapidly and then suddenly drop sharply, with declining volume. Be cautious—if the decline exceeds half of the previous rise, it might be a good opportunity to jump in for a short-term rebound.

When the monthly and weekly charts are both at low levels, with volume stacking up, the 3-day moving average rising with volume, the 60-minute chart showing a volume-driven golden cross upward, continuous volume at the price level, and large buy orders appearing, it indicates the stock is in a hot sector just starting up, suitable for short-term entry.

Finally, and most importantly—if you make a wrong call and buy at a low point, but the price continues to fall, you must cut losses immediately. Conversely, when the price reaches a psychological level, take profits quickly and don’t be greedy. Many people lose money because of this.

I’ve noticed that in short-term trading, mindset is often more important than technical skills. It’s easy to succeed in demo trading, but real trading often results in consecutive losses from the start. That’s a mindset issue. You need to control your emotions, practice good capital management, understand losses correctly, always prioritize risk control, and view profit as secondary.

To achieve steady profits in short-term trading, traders must be good at identifying potential opportunities, effectively managing risks, and utilizing technical analysis. These skills may seem simple, but few can truly master them. The market always looks forward, reacting to current events. At this point, technical analysis becomes especially important. While short-term oscillations are hard to predict precisely, as long as you can control losses and let the price fluctuate significantly in your favor, there’s a chance to profit. Time will help generate returns.