Common Trading Strategies (Core: Precisely Determine Buy/Sell Points)

Covering five major categories—trend, oscillation, reversal, capital, and cycle—this guide clearly explains the “entry signals + profit-taking and stop-loss logic,” and is applicable to common markets such as stocks, gold, crypto, and futures.

1. Trend-Based Strategies (Follow the Trend—Most Stable Win Rate)

1. Moving Average Crossover Strategy (The Most Basic)

- Buy point: a short-term moving average crossing above a long-term moving average (golden cross), such as a 5-day golden cross over a 20-day or 60-day line; price holds above the moving averages.
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- Sell point: a short-term moving average crossing below a long-term moving average (death cross); price breaks below key moving average support.
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- Applicable to: one-direction uptrends/downtrends—avoid sideways range-bound consolidation.

2. Trendline + Channel Strategy

- Buy point: a pullback that touches the rising trendline or the channel’s lower band; volume contracts and the market stabilizes, then rebounds.
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- Sell point: breaks below the trendline or the channel’s lower band; the rebound lacks strength.
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- Advanced: buy the lower end in an ascending channel; in a descending channel, only short / do not go long.

3. MACD Trend Strategy

- Buy point: a golden cross below the zero line (MACD in the negative area), DIFF turning upward, and the green histogram bars shortening.
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- Sell point: a death cross at high levels (MACD high), red histogram bars shortening, and a top divergence.

 

2. Range-Bound (Oscillation) Strategies (For Box/Range Markets Only)

1. Sell High at Resistance, Buy Low at Support

- Buy point: pull back to historical strong support levels, previous lows, and round-number levels, then show a reversal sign with prices stabilizing.
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- Sell point: rebounds that reach strong resistance levels, previous highs, or areas where positions/chips are densely concentrated.
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- Rule: keep trading repeatedly within the box; once the price breaks out of the box, switch to a trend strategy.

2. Bollinger Bands (BOLL) Strategy

- Buy point: price retraces to the lower Bollinger Band, indicating an oversold rebound signal.
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- Sell point: price touches the upper Bollinger Band, followed by a short-term overbought pullback.

 

3. Reversal Bottom-Taking / Top-Escaping Strategies (Catch the High/Low Turning Points)

1. Top/Bottom Divergence (RSI/MACD)

- Bottom divergence (buy): price makes a new low, while the indicator does not make a new low—downside momentum is exhausted.
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- Top divergence (sell): price makes a new high, while the indicator does not make a new high—upside momentum is exhausted.

2. RSI Overbought & Oversold

- Buy point: RSI < 30, severe oversold, with a candlestick signaling that selling pressure is stopping.
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- Sell point: RSI > 70, severe overbought, with volume showing stall while the price lags.

3. Candlestick Pattern Reversals

- Bullish signals: a needle-like bottom probing (golden pin), a morning star, bullish engulfing, and double bottom (W-bottom).
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- Bearish signals: dark cloud cover, an evening star, bearish engulfing, and double top (M-head).

 

4. Volume-Price Combination Strategies (Real Capital Behavior)

1. Increasing volume with rising price: a breakout through resistance with volume; funds enter proactively, and the trend starts.
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2. Decreasing volume on pullback entries: in a trend, a pullback with reduced volume; the shakeout ends, followed by a second push higher.
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3. Selling on a volume surge breakdown: a major drop accompanied by huge volume; capital exits; the outlook turns weaker.
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4. Selling at new highs with shrinking volume: rising without volume; bulls are running out of strength—pullbacks may happen at any time.

 

5. Breakout / Breakdown Trading (Commonly Used for Short-Term, High Frequency)

1. Breakout Buy

- Breaks through a key resistance level, the top of a range box, or a previous high with volume; if a pullback does not break through, enter directly.

2. Breakdown Sell

- Breaks key support, the neckline, or a long-term moving average effectively (closing below it + not recovering by the next day); leave immediately.

 

6. Multi-Period Confluence (The Core to Improve Win Rate)

Use “a major cycle to set direction, a smaller cycle to find entry/exit points”

1. Daily / 4 hours: determine the overall trend (bullish / bearish)
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2. 1 hour / 15 minutes: precisely capture short-term entry points

- Major cycle bullish + minor cycle golden cross / bottom divergence = high value-for-money buy point
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- Major cycle bearish + minor cycle death cross / top divergence = decisive sell point

 

7. Universal Risk Management Rules (Required for All Strategies)

1. Any buy point must come with a fixed stop-loss (below support, below the moving average).
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2. Enter in batches to avoid going all-in at once.
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3. In range-bound markets, don’t use trend strategies; in trending markets, do less high-sell and low-buy.