[Red Envelope] From Theory to Practice Series: Practical Articles Part 5 — Building a Short-Term Big Picture Perspective

This institution focuses on short-term trading research, updating from March 9, 2026. Daily reviews are straightforward, providing only practical content and real operations—after the market closes each day, I will break down emotions, analyze core sectors and popular stocks, and predict tomorrow’s trading direction based on today’s market conditions and my personal operations. I will summarize my daily short-term insights and provide a concise short-term strategy before 8:00 AM the next day. [淘股吧]
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Today, I want to discuss the big picture of short-term trading. Why should we develop our own big picture perspective? Because only by understanding the logic and competitive relationships between sectors and stocks, as well as the emotional cycles, can you navigate trading with confidence. You can effectively create a scientific plan to focus on good stocks, and use the big picture perspective to determine which positions are clearly being phased out and should be quickly liquidated. Otherwise, your operations will be disorganized and without strategy, making it impossible to achieve stable profits in short-term trading and reach the peak of your life.

Those doing short-term trading often have such confusion: staring at the market every day, studying candlesticks, chasing countless limit-ups, and stepping on numerous limit-downs; sometimes, even when they pick the right stocks, they miss the main upward trend because of poor market sentiment, cashing out after making a little profit; at other times, they stubbornly bottom-fish but end up buying in the middle of a downtrend, getting trapped deeper. In fact, the core of making money in short-term trading is never just “picking the right stock,” but “understanding the entire market”—this is the big picture perspective in short-term trading. Many people turn short-term trading into “gambling,” which essentially means they lack a big picture perspective, focusing only on intraday fluctuations of individual stocks while neglecting underlying logic such as market sentiment, sector rotation, and capital flow.

I. First, understand: what exactly is the big picture perspective in short-term trading?

Many people mistakenly believe that the big picture perspective is about “predicting the market’s ups and downs” or “looking at long-term trends,” but that’s not the case.

The short-term big picture perspective is a comprehensive awareness of the current market ecology—simply put, it means you can clearly judge: is the market currently “capable of making money” or “likely to lose money,” which direction is capital flowing, which stocks can be traded, which stocks should be avoided, and which stocks can continue to be held for consecutive limit-ups, whether to hold a heavy position or stay in cash.
It is not a single technical indicator or the trend of a particular stock, but a comprehensive judgment of “market sentiment + sector mainline + capital flow + stock strength,” serving as a “navigation device” for short-term trading. Without a big picture perspective, it’s like driving without a GPS; no matter how good your driving skills are, you may take wrong turns, detours, or get into accidents. With a big picture perspective, you can avoid pitfalls, find the right direction, and make moves in high-probability zones, reaching the pinnacle of your life.

II. How to build a big picture perspective in short-term trading

The term big picture perspective sounds grand, as if it’s hard to grasp, but in reality, constructing a big picture perspective doesn’t require complicated theories; it boils down to 4 steps, from macro to micro, from judgment to execution, quickly grasping it with recent short-term market examples (March power and computing-related mainline).

Step 1: First judge market sentiment, establish “can we trade”
The root of short-term trading is market sentiment. Sentiment determines the “profitability effect”; if sentiment is off, even the strongest stocks can be risky; when sentiment is on, even weak stocks can make a move. This is the foundation of the big picture perspective and the easiest step to overlook.
Judging sentiment doesn’t have to be complicated; just remember 3 core indicators + 1 sentiment cycle, and you can wrap it up in 5 minutes each day:

1. Core indicators: number of gainers vs. losers (whether there are more gainers or losers), number of limit-ups/limit-downs (more limit-ups = good sentiment, more limit-downs = bad sentiment), limit-breaking rate (high limit-breaking rate = large capital divergence, weak sentiment);
2. Sentiment cycle: ice point → startup → fermentation → climax → retreat, cycling repeatedly, with each cycle corresponding to different trading strategies. The sentiment here can be the overall market sentiment or the sentiment of a single sector.
   Core logic: first judge the sentiment cycle, then determine the trading plan; if sentiment is off, don’t touch even the best stocks. The nodes where sentiment worsens are often when the core leaders of hot sectors begin to falter. Currently, we are at a critical point of high volatility for Huadian Liaoneng. The chances of a sharp drop for Huadian Liaoneng are relatively low, so even if it is in a faltering state, it may still trend upwards, preventing market sentiment from collapsing. If, I say if, Huadian Liaoneng is pushed down to the floor after a high opening on Monday morning, then it’s advisable to quickly liquidate short-term positions and be cautious on Tuesday. If we classify the sentiment cycle from high to low as ABCD, we are currently around the B-level sentiment cycle and likely to develop towards the C-level.

Step 2: Next, find the sector mainline, determine “what direction to take”
Once sentiment is established, the next step is to find the sector with the most concentrated funds and the hardest logic—this is the mainline. To make money in the short-term, only trade the mainline, avoid side lines and weak stocks; this is the core principle of the big picture perspective.
Many people lose money because they buy randomly: when the mainline is in power, they buy real estate; when the mainline is in medicine, they buy consumer goods, and ultimately watch the mainline rise while their stocks remain stagnant or even decline.
How to quickly identify the mainline? Remember 3 standards (using the power mainline example from March 20 after the market close):

1. Capital intensity: sector funds show sustained net inflow, and trading volume increases, with the total transaction amount of limit-up stocks in the power sector reaching 26.542 billion;
2. Complete tier: there are leaders (Huadian Liaoneng with 5 limit-ups), secondary rising stocks (Shaoneng Co. with 3 limit-ups), and front-row stocks (multiple 2-limit-up stocks); it’s not just one stock rising, but the whole sector is moving together;
3. Hard logic: backed by policies and event-driven (March’s “Power and Computing Coordination” policy), not a one-day wonder but has sustainability.
   The mainline sector is the “gathering place” for capital and the core of profitability. Following the mainline, you can greatly increase your chances of making money.

Step 3: Identify candidate stocks
Once sentiment and the mainline are established, the last step is to pick stocks—note: stock selection must be within the mainline; avoid individual stocks that stray from the mainline, no matter how strong they are (unless for small position arbitrage).
Under the guidance of the big picture perspective, stock selection is not about “searching through all stocks,” but “selecting the strongest and most identifiable stocks within the mainline,” ranked from high to low priority:

1. Leader stocks: the largest gain within the sector, the strongest driving force, the highest limit-up streak (like Huadian Liaoneng in the March power mainline), most identifiable, with capital clustering, highest margin for error, but pay attention to its critical point of height;
2. Secondary rising stocks: after the mainline peaks, low positions initiate, quickly limit-up, taking over funds from leaders, risks lower than leaders, considerable profit potential, but the height won’t be too high;
3. Front-row stocks: second/third limit-ups within the mainline, healthy volume-price relationships, high recognizability, suitable for mid-way or low-entry;
4. Arbitrage stocks: first limit-ups at low positions within the mainline, oversold rebound stocks, only participate in small positions when the mainline is strong, take profits quickly (like Guangxi Energy and Jinkong Power last Friday).
   Core logic: strong stocks within the mainline have capital support and thematic backing, making them far more likely to be profitable than weak stocks outside the mainline.

Step 4: Execute and maintain discipline to uphold the big picture perspective
Many people understand the big picture perspective, yet still lose money because of “discrepancy between knowledge and action”—they clearly know it is a retreat period, yet cannot resist bottom-fishing; they clearly know these are weak stocks, yet cannot help but chase higher.
Implementing the big picture perspective depends on 3 rules that must be strictly followed:

1. Position discipline: 0-30% in ice point/retreat periods, 50-80% in startup/fermentation periods, 30-50% in climax periods, with positions following sentiment cycles;
2. Stop-loss discipline: if not reaching limit-up on the same day of purchase, prepare for a loss expectation of within 5%, or if it drops below key support levels, exit unconditionally, do not cling on, do not stubbornly hold;
3. Trading discipline: only trade the mainline, only trade strong stocks, do not trade impulsively, do not change strategies on a whim, it’s better to miss out than to make mistakes.

III. Once again, emphasize how important having a big picture perspective is?

Many people feel that “the big picture perspective is too vague” compared to practical K-lines and indicators, but in reality, the big picture perspective can help you avoid pitfalls and seize opportunities far more than you think—over the long term, the difference is immense.

1. Avoid loss traps and reduce ineffective trades
   People without a big picture perspective easily make 3 fatal mistakes: bottom-fishing in retreat periods, randomly buying weak stocks, not stopping losses. With a big picture perspective, you can clearly judge:

• In retreat periods, staying in cash can avoid major drops (like last week when the index plummeted, other sectors retreated, many people bottom-fished weak stocks and suffered limit-downs. Meanwhile, I focused on the power sector, which still had limit-ups);
• Avoid side line weak stocks to prevent “small gains and large losses” (many side line stocks rise 1-2 points and then pull back, while mainline stocks can limit-up, creating a huge disparity);
• Strictly stop losses to avoid “turning short-term into mid-term, mid-term into long-term” (many people lose and stubbornly hold, ultimately getting trapped, while those with a big picture perspective stop losses in time to protect their capital, allowing for future profit opportunities).
  A real comparison: with the same 100,000 capital, those without a big picture perspective may lose 20,000 to 30,000 in March; those with a big picture perspective, avoiding retreat periods and heavily investing in leading stocks, may earn 30,000 to 50,000—a difference of 50,000 to 80,000.

2. Capture the main uptrend, amplify profit margins
   The core of making money in short-term trading is to capture the mainline uptrend—and only with a big picture perspective can you judge when the mainline starts, ferments, and reaches its peak, allowing you to hold onto the leaders and reap the largest profits.
   Those without a big picture perspective often sell after a 1-limit-up on the leader, then chase weak stocks, ultimately watching the leader continue to limit-up while they only make a little; those with a big picture perspective know the mainline is in a fermentation period, and the leader still has upward potential, allowing them to hold firmly and profit from 5-limit-ups, 7-limit-ups, doubling their gains.
   For instance, Huadian Liaoneng, which started on March 16, achieved 9 consecutive limit-ups from start to peak, a doubling trend, while I participated from the first limit-up auction and continuously profited from it. Those with a big picture perspective can enter during the startup phase, hold firmly, and capture the complete main rising wave; those without a big picture perspective either hesitate to buy or sell too quickly, missing out on most of the profits.

3. Escape emotional exhaustion, establish a stable profit logic
   Many people doing short-term trading spend their days in “anxiety, regret, greed, and fear”: buying leads to drops, filled with regret; selling leads to rises, kicking themselves; seeing others’ stocks rise while their own decline, causing them to lose their composure and act irrationally.
   However, with a big picture perspective, you will become “composed”—because you know what stage the current market sentiment is in, what the mainline is, and whether your actions are right or wrong, without being swayed by intraday fluctuations.
   For example, if you buy the leading stock in the mainline at a relatively certain window during its third limit-up, even if it slightly retraces the next day, you know this is normal fluctuation and won’t panic and sell; if you’re in cash during a retreat period, even if some stocks hit limit-ups, you understand this is an exception and won’t impulsively chase higher.

This composure allows you to avoid emotionally driven ineffective trades and establish a closed loop of “judgment → execution → review,” gradually forming a stable profit logic—this is the core of making money in short-term trading.

That concludes today’s review article. If you find today’s article helpful, please remember to like, follow, tip, and share. Our institution shares short-term reviews and trading suggestions every day, accompanying everyone in the short-term market to trade and grow, steadily profiting!

Disclaimer: This article is only a record of my operations; investing involves risks, and trading requires caution. The content of the article reflects personal thoughts and records, serving only as a personal sharing note, not constituting any investment advice, and is for reference only. Trading based on this, profits and losses are at your own risk.