This week, we completed all five lessons on the trading system.

We’re not learning anything new today—we’re linking the five lessons together to see exactly what kind of system we’ve built.

Starting next week, we’ll move into an entirely new module—technical chart patterns. We’ll break down trendlines, channels, and patterns (head and shoulders tops, double tops and bottoms, flags, triangles, etc.) one by one. Basic tools such as moving averages, MACD, and KDJ will not be covered again—we’ll assume everyone has mastered them.

I. The Framework of the Five Lessons
1.1 Lesson One: Candlesticks—Understanding the Market’s Language
Core content: Four prices, bodies, wicks, trading volume, and key patterns

Core objective: Read the outcome of the battle between bulls and bears from candlesticks. Candlesticks are not prediction tools; they are interpretation tools.

1.2 Lesson Two: Determining the Trend—Judging the Trend Direction
Core content: The three-step trend determination method—the high-low point method, the single moving average method, and the candlestick strength verification method

Core objective: Look at momentum first, not price. Go long only in an uptrend, go short only in a downtrend, and stay out during sideways movement.

1.3 Lesson Three: Selecting Entry Levels—Finding Support and Resistance
Core content: Previous highs and lows, moving averages, Fibonacci, trendlines, round numbers, and support-resistance flips

Core objective: The trend determines the direction, while entry selection determines buying and selling. Even if you get the direction right, you can still lose money if the entry level is wrong.

1.4 Lesson Four: Monitoring the Market for Signals—Waiting for Confluence Signals
Core content: Volume-price confluence (breakouts with increased volume, pullbacks on declining volume, volume-price divergence), indicator confluence (MACD+RSI+KDJ+Bollinger Bands), and multi-timeframe confluence

Core objective: Once the direction is determined and the entry level selected, wait for a confluence signal before entering. Without a confluence signal, even the best entry level is not worth the risk.

1.5 Lesson Five: Completing the Trade Cycle—from Entry to Exit
Core content: Entry (the three-stage position-building method), adding to positions (the pyramid adding method), take-profit (fixed percentage + key levels + trailing take-profit), stop-loss (structural stop-loss + percentage stop-loss), and risk management (total position size ≤50%, single-coin exposure ≤30%, daily loss ≤3%-5%)

Core objective: Plan your trade, then trade your plan. From analysis to execution, every step has a standard.

II. The Complete Trading Cycle Across the Five Lessons
The lessons were broken down one by one so that everything could be explained clearly. Only when used together do they become a trading system.

The complete trading process should look like this:

Open the chart and look at the candlesticks first—read the language (Lesson One)

Use the three-step trend determination method to judge the direction—set the direction (Lesson Two)

Mark support and resistance levels—select the entry level (Lesson Three)

Wait for volume-price + indicator confluence signals—wait for confirmation (Lesson Four)

Build the position in three stages—enter (Lesson Five)

Add to the position using the pyramid method—scale in (Lesson Five)

Use structural stop-loss + percentage stop-loss—control risk (Lesson Five)

Use fixed percentage + key levels + trailing take-profit—exit (Lesson Five)

Review, optimize, and rebalance—iterate (Lesson Five)

Once these nine steps are complete, one trade has gone through the full cycle. Every step has a standard—don’t skip steps, cut corners, or rely on feelings.

III. Review of the Core Points of Lesson Five
Lesson Five is the “execution layer,” and it is the most practical lesson. Let’s emphasize the core points once again:

3.1 Position Building—the Three-Stage Method (30%→40%→30%)
The first position tests the waters (30%); if the trade is wrong, exit with a small loss without affecting the overall plan. The second position adds to the trade (40%); add only after the first position has gained more than 5% or after a pullback confirmation, giving you a better cost basis and greater trend confirmation. The third position makes the final push (30%); enter when a key level breaks or an acceleration signal appears, aiming to capture gains at the end of the trend.

Each position has its own stop-loss, with the tightest stop-loss on the first position.

3.2 Adding to Positions—the Pyramid Method (Decreasing Principle)
The first batch is 5 lots, the second batch is 3 lots, and the third batch is 2 lots—the bottom is larger and the top is smaller. The higher the price, the greater the risk, so the smaller the position size. The bottom position is the foundation; the top position is the final push. Never add to a losing position to dilute the cost basis—this is an ironclad rule.

3.3 Take-Profit—Combining Three Methods
Fixed-percentage take-profit (sideways markets), key-level take-profit (swing trading), and trailing take-profit (one-way trends).

Combined strategy: Take profit at key levels on 50% of the position and use a trailing take-profit on the other 50%. Lock in profits on the first half and pursue more upside with the second half. Heavy volume with stagnant prices at highs, bearish divergence, or a failed breakout—take profit immediately; don’t get greedy.

3.4 Stop-Loss—Set It When Entering and Never Widen It
Structural stop-loss (3%-5% below the support level) + percentage stop-loss (1%-2% loss per trade). Set the stop-loss at the same time as entering the trade; don’t delay or wait. When the price approaches the stop-loss level, do not widen the stop-loss.

3.5 Risk Management—Total Position Size ≤50%, Single-Coin Exposure ≤30%, Daily Loss ≤3%-5%
Keep total position size below half and retain sufficient reserves. Keep exposure to any single coin below 30% to diversify risk. Once the daily loss reaches 3%-5%, shut down and rest—no more trading today; come back tomorrow. After three consecutive stop-losses, take a mandatory break and calmly review the trades.

IV. Preview of the Next Stage: Technical Chart Patterns
Basic tools such as moving averages, MACD, and KDJ have already been covered in the previous five lessons and will not be repeated.

Starting next week, we’ll enter an entirely new module: technical chart patterns.

In plain language: Earlier, we learned to use indicators to determine trends. Next, we’ll learn to “read patterns”—to look at the chart formations created by price itself.

Three major sections:

First, trendlines and channels. How do you draw trendlines? How do rising channels, falling channels, and parallel channels work? What does a channel breakout mean?

Second, reversal patterns. Head and shoulders tops, head and shoulders bottoms, double tops, double bottoms, rounding tops, and rounding bottoms—when is a “bottom being built”? When is a “top being formed”? How does price move after a pattern is completed?

Third, continuation patterns. Flags, triangles, wedges, and rectangles—when these patterns appear in the middle of a trend, are they signals that the trend is “taking a break before continuing,” or signals that “a reversal is coming”? How can we tell the difference?

Once you’ve learned chart patterns, combine them with the previous five lessons:

Candlesticks (Lesson One) → Understand individual candlesticks

Trend determination (Lesson Two) → Judge the trend direction

Entry selection (Lesson Three) → Find support and resistance

Confluence (Lesson Four) → Confirm the entry signal

Trade cycle (Lesson Five) → Execute the trade

Chart patterns (starting next week) → Understand the language of the price chart itself

V. One Sentence for Everyone
Across the five lessons, from candlesticks to the complete trade cycle, we have built a complete trading system.

All that remains is to do two things: first, practice repeatedly in live trading. Second, continue studying chart patterns in the next stage.

Trend determination gives you direction, entry selection gives you an advantage, confluence gives you confidence, and the complete trade cycle gives you discipline. Direction, entry level, signal, and execution—when these four links are connected, they form a complete trading system.

Next week, we’ll begin discussing technical chart patterns—using the language of the charts themselves to understand the market’s past, present, and future.

I’m Yibo, and this is Yibo Talks Crypto. See you in the next lesson!