[Red Envelope] 4.5 Review: Sharing key insights under the achievement of the Double Dragon Playing with Pearl—Complete Dragon Capture System!

Hello everyone, I’m A Ming. I’m very happy to get to know you all through this platform!

All of our efforts are not meant to persuade others, but to persuade ourselves.

The core idea in super short form: cycles rule, leaders are supreme, in proper sequence, with distinctions between strong and weak; timing matters more than stock picking, and strength matters more than price.

The 20-character secret mantra for super-short-term trading: The great way is simple; go with the trend; the model comes first; when the market is against you, keep the spark—go from weak to strong.

A Ming doesn’t have any fancy flowery words—only a sincere heart, real and earnest, dedicated to sharing with fellow fighters! So after you finish reading, please give a free like. If you have the means, throw in a tip or add your boost—mainly to liven up the post’s atmosphere so more fellow fighters can see it!

If this post doesn’t have 7 boosts, then after this I won’t share anymore! You can’t just keep getting freebies without enough respect!

1. Ask yourself these five questions before the market opens every day:

1. Is the stock I’m going to trade part of the main theme?
2. Is the target I’m trading the highest and the only one?
3. Has the stock I’m going to trade been crushed and squeezed the day before?
4. Is today a “double outperformance” day?
5. Is the current sentiment one of the turning points below?

①. Is it a new cycle’s early upturn turning point after the previous main theme is cleared out?

②. Is it a turning point where it breaks through recent height resistance?
③. Is it the turning point when it stands at the seven-board sentiment breakthrough point
④. Is it the turning point of the main theme’s main advance?
⑤. Is it the turning point of the main theme leader’s second-wave and third-wave?

2. The Three Treasures of the intraday chart:
Opening price, moving averages, the 0-axis

3. What is sentiment?

For example, did Yueneng not go up when Guizhou (掌阅) didn’t reach the six-board?
Did Liaoneng not go up when the Three Rooms (三房) didn’t reach the six-board?
Did Xinghui not go up when Xuelang Environment (雪浪环境) and Hongchang Technology (宏昌科技) didn’t reach the three-board?
That’s when sentiment arrives!!!

Xinghui Huanrui is just like Yueneng Holdings and Huadian Liaoneng—same logic. If the two ahead of it couldn’t hold above the three-board, then when it stands above it, isn’t that when the sentiment leader has arrived? Yes.

Is it beyond expectations? Is it the highest and the only one? Is it breaking through left-side pressure? Was yesterday’s Xinghui in the early stage of an uptrend?
Our thinking often limits itself to whether today’s Xinghui will fall back like the first two. Right or wrong?
We’re all worried we’ll end up like those first two, but we don’t know that once it stands up, that’s when the sentiment arrives. Sentiment has no quantitative standard—it’s something you feel in the market. Master said this very well: since you’ve stood above it, then I definitely have to go—no matter whether it fails the board or doesn’t!!!
What we need to do is to overcome our own psychological barriers, right? You can only succeed if you overcome your own psychological barriers!

4. What does “standard volume capacity” look like?
For most individual stocks, volume capacity usually expands when there’s disagreement, and shrinks when it turns consistent. Normal volume capacity is that volume should shrink for one or two days, and then disagreement should expand. Or, after disagreement day, if the next day turns consistent, volume should lock and shrink. If volume capacity keeps expanding for more than two consecutive days, or keeps shrinking for three consecutive days, that’s considered abnormal—what’s usually called “shrinking volume that can’t hold” or “a one-wave flow.”

Let me share the double-dragon entry points first:

In-depth knowledge: the start, disagreement, withdrawal, and leader formation of the main-theme sector; the main advance; decline and exhaustion; rotation

(1) Main theme

1. How the main theme forms:

1. The formation of a main theme must resonate with the overall market index:
   Not everything that resonates with the overall market index is a main theme, but for something to become a main theme, it must resonate with the overall market index!!! A main theme must have the appearance of a high-level leader, not a theme “vehicle” that switches every two or three days. A theme that switches every two or three days is called a rotating theme!
   The main theme forms during the decline of the old cycle, because for consecutive boards you need to “clear out,” so new-theme trends move first by pushing up to test height as guidance; then during the pullback period, consecutive-board in that new theme tests that height to confirm. After the decline of the old cycle ends, the consecutive boards of the newly emerged theme basically become the leader!!!
   For example, last year in biopharma: Shutaishen’s trend led first, and many later sat back and enjoyed it, like Changshan Pharmaceutical. In the Taiwan-related “across the strait” theme: Pingtan Development led first by trend, and then jointly worked as HeQi and Lian to hit the height with Anhui?—okay, that’s actually 合富中国 (HeQi China) that made the consecutive board hit the height; later there were Jiumu Wang, Zhongshui Fishery, Sanmu Group, Haixin Food, etc. sat back and enjoyed it. In commercial aerospace: Aerospace Development led first by trend, and Shunhao Co., Ltd. made the consecutive board hit the height; later Giant Force, West Power, Dongli, Shenjian, etc. sat back and enjoyed it. For gold: Hunan Silver led by trend first, and Baiyin Nonferrous made the consecutive board hit the height. In “electronic calculations integration”: Han Cable led by trend first, and Yueneng Holdings hit the height; Huadian Energy and Huadian Liaoneng sat back and enjoyed it!
   Now, in biopharma Wannbangde led by trend first, and Jin Ya?—actually, Tianjin Pharmaceutical (津药药业) hit the height—so which ones later will sit back and enjoy it? It’s like a bullet train that starts running at high speed: the farther back, the smoother the ride feels!!!
   ①. Upward resonance in the same direction
   That is, the theme and the broader market resonate upward together; this resonance can happen on the same day, or it can be that during the middle of the theme, the theme and the broader market resonate upward together. For example, on 3/24, the biopharma theme resonated upward with the broader market on the same day. On 1/20 for gold and on 2/11 for power, the resonance occurred in the middle—when the broader market and the theme were resonating upward.
   ②. Reverse resonance
   That is, the theme rises but the broader market breaks down downward. For example, on 4/7, the trade war theme rose while the broader market fell after a breakdown.

2. The time to select the main theme:
Choosing a new direction must be done before the old main theme’s decline—but the signals that confirm it will only appear when the old main theme truly goes into decline. Confirmation of the main theme must happen after signals, with the leader appearing earlier than the theme—for example, Aerospace Development appeared before the leader during the decline of the Taiwan-related theme; only on 11/28 did the commercial aerospace sector officially start. The leader starts before the sector; also, you need to see whether there are capacity/size stocks appearing!

3. Characteristics of main-theme concepts:
When the broader market rises, the theme leader rises; when the broader market adjusts, the theme leader still rises—and it forms a complete ladder structure with a high-level leader appearing. On the next day, there are first-board helpers. If that’s the case, then it’s basically the main theme.
Key point: when the broader market rises, the leader rises; when the broader market falls, the leader still rises—not that the theme keeps rising continuously. For example, on 3/23 both the broader market and the theme fell sharply; yet Huadian Liaoneng still turned disagreement into consistency and upgraded to a six-board. Didn’t it scare off a lot of people?

4. Disagreement within the main theme:
The sector leader breaks the board, hits the limit-down, or has a big drop; within the sector, among first boards or second boards, there is one large-order one-word limit (一字) or a “seconds” board on the open.
①. If the leader breaks the board but the next day it appears again with a limit-up form, that belongs to the leader’s second wave. For example, Guofang Group, Shoukai Co., and HeQi China.
②. If the leader hits limit-down or has a big drop, but then stabilizes and goes into an uptrend on the next day or the third day—this situation usually indicates that the main-theme concept will show a second wave. The carrier for the second wave is the strongest first board when the leader retreats by one or by two. For example, after Yueneng Holdings’ initial big drop, the Shunnn?—actually, 顺纳 (Shun Na) and Huadian Energy; and after Yueneng Holdings produced two consecutive limit-downs, Huadian Liaoneng appeared.

5. Main-theme withdrawal (decline):
The old leader and the new leader both hit limit-down; mid-cap stocks get completely slaughtered; there’s no large-order one-word (一字) among first boards or second boards. For example, the power sector on 3/30. If at this time you still trade power, then that’s a gift-to-a-child who hands out money. For example, Guangxi Energy and JinKong Power. On 4/2, New Zhonggang and Tongda Co. even wanted to snatch the lead at the open—meanwhile Tianjin Pharmaceutical isn’t dead yet. You, that minister who got replaced, won’t get killed? Guangxi Energy, JinKong Power, New Zhonggang, Tongda all look like a bullet train sliding after braking—what sentiment momentum is there left? When the train is running fast, you don’t jump on to enjoy the ride; instead you insist on waiting after the braking for the chance to board. When it’s going fast, only高手 (experts) can climb onto the train, right? When everyone can board after braking, that’s when your account starts shrinking—right now!!!

(2) Categorization of leaders:

1. Leader that appears before the main theme (先于龙):
A leader that appears before the main theme develops while the old main theme hasn’t finished withdrawing yet. This is what the controlling capital tests—where the resistance is the smallest—then the future direction of attack is also indicated. Usually, leaders that appear before come from products of the old cycle, so the birth of a new cycle still needs to wait until the “before-leader” breaks the board before it strengthens. For example, Aerospace Development’s first board on 11/14 and the commercial aerospace sector kicked off on 11/24 with it leading—back then, the leader wasn’t Aerospace Development. After Aerospace Development broke its board and waited 5 days, on 11/28 it led a renewed surge in commercial aerospace, entering the main theme lineup. Recently in Wannbangde and Menouhua: first boards on 3/13, then first boards on 3/20 and 3/24. At that time, power was still the main theme and its leader Huadian Liaoneng was in the climax. That means it was still a product of the power old cycle. On 3/31, Menouhua fulfilled the mission of a before-leader after the power sector’s 3/30 withdrawal. Then Tianjin Pharmaceutical’s 2-to-3 over-performance came through a weak-to-strong relay on Menouhua, and surpassed Menouhua’s height to upgrade to a six-board.

The “mission” of a before-leader is to appear when the old empire is about to collapse—like rebellious vassals in a civil war. These vassals may become the overall main leader, for example Aerospace Development, Pingtan Development, and Yueneng Holdings. Historically, that’s like Zhu Yuanzhang and Li Shimin. There are also those who can’t become the overall main leader, like Chen Youliang at the end of the Yuan Dynasty, and Xiang Yu at the end of the Han Dynasty.

2. Sentiment leader (情绪龙头):
Sentiment leaders are born after the old cycle’s withdrawal and after the new cycle is established. That means the groundwork was laid by the before-leader, and then they “ride on the dividends.” Examples include HeQi China, Shenjian Co., Baiyin Nonferrous, Yueneng Holdings, Huadian Liaoneng, Tianjin Pharmaceutical—similar to historical Liu Bang, Li Shimin, Zhao Kuangyin, Zhu Yuanzhang, and others. Sentiment leaders are also divided into strong “one-wave-flow” leaders—for example, the Qin Dynasty or Sui Dynasty historically: it stays strong without much disagreement all the way, and that kind of cycle is relatively short, like Tianjin Pharmaceutical. Another type is “midway like Leonardo,” and then later turns to consistency; this usually takes longer, like the historical Guangwu Emperor’s resurgence and the Tang Dynasty’s Li Longji’s resurgence, and so on.

3. Accompanying leader (伴随龙):
This usually appears when the sentiment leader turns from disagreement to consistency—for example, Hunan Development and Chongyao Holdings. Hunan Development appeared when Huadian Liaoneng turned to consistency on 3/23.

4. Sentiment pioneer of the leader (情绪龙先锋):
This type is usually used to extend the life of the sentiment leader—basically a blood-supply package. It gets rotated more frequently, so its lifespan is shorter. That’s usually what people call an arbitrage stock.

5. Soul central army (灵魂中军):
This usually belongs to the “stabilizing role” inside the main-theme concept. Generally, only when the central army’s trading value is over 5 billion is it qualified to be called the central army. The central army is also often replaced. If it gets replaced frequently, then that concept’s cycle is usually short too.

(3) Summary:
The leaders discussed above can’t be bound by form. The timing and form of the leader’s birth, the main advance, exhaustion, and switching are all different and dynamically changing. We can’t use a single method to deal with all leaders, but what we have to do is wait for the “dao” to appear at the right time, for the main theme to form—then once it matches the pattern, focus on it. Typically, leaders come from the dao formed by main theme + key node + breaking the deadlock + first-board assist, paired with the arts of “highest and only,” “big overreaction (爆凹),” and “double outperformance.” Let the leader come to us first, and then we join it—not when the vassals are fighting and mixing things up, and not by being smart and guessing on our own. What we do is: after the dynasty is established, then we go for the imperial examinations to earn fame and wealth and capture the dividends! When the vassals’ war is going on, and when the new dynasty has just been established with everything yet to be managed, we shouldn’t go then—we should wait until the feasts and music are in full swing. That way, our little lives are preserved, and we can enjoy wealth and honor!

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