Every day, chasing gains and selling off in panic, is really not as good as thoroughly understanding market principles.

Honestly, since surviving that cold winter in 2018 until now, I started with just 10,000 yuan to test the waters, and later saw a peak of 10 million. Now I realize, this is not luck, nor some exclusive secret, but finally understanding the underlying logic of trading.

To put it plainly, the market revolves around four laws: trend, inertia, return to mean, and repetition. Today, I want to share my real thoughts in hopes of helping everyone avoid a few pitfalls.

**The First Law: The trend is your only friend**

The trend is like a river, continuously flowing in a certain direction. I’ve seen too many people trying to go against the trend, only to be harshly taught a lesson by the market.

How to identify the start of a trend? When the market repeatedly oscillates at low levels and suddenly breaks through key support levels with increased volume, the truly savvy funds have already quietly positioned themselves. Take the shakeout on August 18, 2023, for example; it later triggered a new round of market movement, but many people were still afraid to act in the shadow of a bear market.

Don’t mistake a rebound for a reversal. Once a true trend is formed, it doesn’t end in a day or two; it takes several weeks or even months. For instance, the rally in October 2023, although with some adjustments, maintained an overall upward direction that never changed.

**The Second Law: Inertia determines how far the market can go**

Once a trend is established, it has inertia—similar to pressing the accelerator in a car and then releasing it, the car will continue to surge forward for a while. Many people get off too early because they don’t understand this.

My approach is simple: every pullback within a trend is an opportunity to get in, not a signal to exit.