The trading diagram — the skeleton of the whole method

Core idea

The entire act of trading boils down to one diagram: look at what shape the market is currently in → set the thinking + tactics for that shape → find the timeframe currently running a wave → check whether the small timeframe has enough evidence yet → enter with a fixed stop-loss → manage the trade → record & review. Every step has a closed question; if you can answer it, move on, if you can't, stay out — not "look at the chart and go with a feeling." Goal #1 isn't making money, it's saying NO to most opportunities; goal #2 is finding the 1–2 truly good opportunities and saying YES to them.

Details

Why a diagram is necessary

The teacher uses it to answer a very specific question: why does one student enter 50 trades in 6 days while the teacher enters only 1? The answer: that student skipped the entire chain of rules and jumped straight from "looking at the chart" to "clicking the button."

The diagram exists to do three things:

1. A filtering machine — the market is ~80% song rui ro vs song loi nhuan|risk wave, only ~20% profit wave. The diagram is the filtering net.
2. Cutting out unnecessary hesitation — each step asks exactly one question, no wandering.
3. Preventing overtrading — whichever step doesn't have enough evidence, stop there; there's no "roughly good enough."

The teacher's instruction: print the diagram, stick it at your workstation, and, by hand, note under each step exactly which piece of knowledge you've learned that corresponds to it. Look at the chart and you know what to do.

STEP 1 — "What is the trend?" What shape is the market currently in?

There are only 3 shapes, no fourth shape:

The tool to answer this: multi-timeframe RSI — the slope and the spread of the two moving averages show whether the RSI trend is real or not. → RSI trend & the two moving averages, Multi-timeframe (multi-timeframe logic)

Sideways comes in two kinds, and they must be distinguished because the tactics differ:

• Sideways from contestation — timeframes are out of phase with each other (this one wants to rise, that one wants to fall). → still playable.
• Sideways from no force — the prior high isn't very high, the prior low isn't very low, RSI gradually converges toward the 50 zone. This is an absence of both buying and selling pressure, not contestation. → rest, or only look for small-timeframe patterns with very low expectations.

→ Identifying the range zone

STEP 2 — Set your THINKING and TACTICS for that shape

This is the step that gets skipped most often, and also the step that wrecks the most accounts.

The most subtle point of this step — getting used to the stage's price range. If you've just come through a sideways stretch with a range of a few hundred points, your brain gets used to "a few hundred points is a lot." Move into a bullish stage where an H1 wave runs 5,000 points — you'll be scared and close too early. The fix: go back to past charts from a similar bullish stage and measure concretely: how many points does a 15m wave run, how many for H1, how many for H4, is the correction fast or slow. In a strong trend, corrections are usually very shallow and very fast.

→ Range vs trend tactics, Tactical mindset — the process to determine before entering a trade

STEP 3 — Which timeframe is currently DECIDING the market? Which timeframe has a PATTERN?

Two questions that must be answered:

• Which timeframe is the wave currently running on? — a wave runs in rotation from a small timeframe up to a larger one (1m → 5m → 15m → H1 → H4 → H12 → 1D...). When a timeframe finishes its wave, it hands the decision over to the larger timeframe.
• Which timeframe currently has a pattern? — no pattern means there's nothing to discuss.

A consequence for your rhythm (very important, few people notice this):

When a large timeframe is deciding: few profit waves, mostly risk waves, low expectation → proactively play sparsely. When the wave moves down to a small timeframe: concentrate hard, watch the entry point closely.

Once you've built this rhythm, the restlessness disappears, and so does the loop: miss a wave → get bitter → jump into M1/M5 → get stopped out → negativity.

→ Wave-progression theory, Overlapping waves & the responsible timeframe

STEP 4 — Is price currently at a BARRIER ZONE of exactly that timeframe?

The root rule: a wave on a given timeframe should be measured against that same timeframe's resistance/support. If an H1 wave is correcting, look for H1's support; don't take 1D's support to measure it.

Two scenarios of a corrective wave, and what they mean:

• A deep correction → measure with Fibonacci. Holding fibo 0.5 or above means the previous wave is still valid. The shallower the correction, the stronger the validity.
• A sideways correction around the peak area (doesn't break support) → this is a strong bullish signal, because it means there's no selling pressure, just buying pressure taking a break.

Call it a BUY zone / SELL zone, not a "buy point / sell point." Anyone who thinks in terms of "points" will always enter too early or miss the entry.

→ Barrier zones by timeframe (resistance · support · feasible TP)

STEP 5 — Has the small timeframe RESET ITS FORCE, and is there a SIGNAL of opposing force yet?

This is the most important filtering step, and the place where 99% of bad trades are born.

5a. Has it reset yet? Within the correction of the wave you're trading, has the small timeframe fully reset its momentum?

How to tell strong momentum apart from weak / already reset:

• STRONG rising momentum: completes its momentum, corrects, then breaks above the old momentum high; sometimes even pulls the next-larger timeframe into rising momentum too.
• WEAK rising momentum / already reset: rises "sputteringly," fails to break the old momentum high, then goes into correction and fails to build new rising momentum.
• A second sign of weakness: during the correction, it inadvertently drags the larger timeframe into the correction as well.
• Falling momentum: completely symmetric.

5b. RESET DOESN'T MEAN IT'S TIME TO BUY YET. This is the point the teacher stresses most sharply. Resetting all the selling force doesn't mean buying force has arrived. Very often price finishes resetting and then loiters around endlessly because nobody's buying, and then the selling force comes back and pushes down further.

You have to wait for a real signal that buying force has actually shown up:

• There's a visible push of buying force coming in, or
• It goes sideways for a while and then breaks above that zone.

5c. Three entry cases (LONG branch):

SHORT branch (symmetric):

Waves don't run in the shape of "down then straight back up, sharp peak sharp bottom." If you see a setup like that — skip it. That's a risk wave, and the evidence isn't sufficient to base a decision on. Evidence has to be built from a cluster of candles / a combination of candles, not from 1–2 individual candles.

→ Entry point, tim diem vao bang rsi, Rising momentum / falling momentum (QTT – QTG), High-probability patterns

STEP 6 — Enter, manage the trade, close

• SL absolutely ≤ 1% of the account. No exceptions.
• If the pattern isn't clean but you still "really want" to enter → lower it to 0.3–0.5% of the account. That is the only permitted way out, not a license to break the rule.
• Out of phase with the immediately adjacent timeframe → lower expectation, raise caution, manage the trade tightly, close early. An example the teacher gives: going long on an H1 pattern while H1 is out of phase with H12's correction wave → only catch 200 points (~3–4%) and close, don't expect more.

→ Managing trades and taking profit, Moving the stop-loss point, Taking profit in a range

Three principles to rewrite every day

The teacher requires writing these three lines every day before sitting down at the desk, like flipping a switch in your rational mind:

1. If there's a pattern, enter; if there isn't, don't.
2. Wait for the pullback wave, wait for the structure.
3. Always have a stop-loss point.

THE GOAL: an upgraded version

The old version:

Goal #1 = avoid risk. Goal #2 = make a profit.

The new version, once you have the diagram:

Goal #1 = say NO to opportunities. Goal #2 = find the truly good opportunity and say YES to it.

A concrete figure: out of 10 opportunities in the market, 8–9 have to be said NO to, only 1–2 get said YES to. A beginner does the opposite — saying YES to 6–7 of them. That is exactly why they lose money.

Weekly self-check: this past week, did I say YES more often or NO more often? If YES was more often, there's definitely a problem — the market doesn't have that many opportunities; if it did, everyone would win and financial markets wouldn't exist.

Saying NO does two things, not one:

1. Directly avoids risk.
2. Nurtures your confidence for the real opportunity. Entering unclear waves → getting stopped out → confusion, loss of confidence → by the time a real opportunity arrives, you no longer dare to enter. This is a far more expensive cost than the money lost.

Putting it into practice

A one-time decision checklist:

□ 1. Market shape (≥1D): Bullish / Bearish / Sideways-contested / Sideways-no-force
□ 2. Thinking set: EXPECT / CAUTIOUS   |  Tactics allowed: Buy only / Sell only / both directions within the range
□ 3. Timeframe currently deciding the market: ____   → matching work rhythm: ____
□ 4. Does the timeframe I'm about to trade have a pattern? ____  Is price at the barrier zone of EXACTLY that timeframe? ____
□ 5. Has the small timeframe reset its force yet? ____  Is there a SIGNAL of opposing force yet? ____  Case 1 / Case 2 / Case 3?
□ 6. Entry point ____  SL ____ (≤1% of account)  Target ____  Exit condition ____
□ If any box is empty → STAY OUT.

Daily work: write the three principles + write out the multi-timeframe analysis on paper (→ Notes & trading journal — the process that turns analysis into discipline) before opening any trade.

Weekly work: count how many times you said YES vs. NO.

What the teacher stresses / common traps

• "Everyone already has the knowledge. What's left is nerve." The hard part isn't understanding the diagram — the diagram is all things you've already learned. The hard part is having enough nerve to say NO in unclear zones.
• Under 3 years of experience, absolutely no "improvising." People tend to bend new knowledge to fit old habits (e.g. someone used to a manual-transmission car switches to automatic and invents their own idea of putting their left foot on the brake). 99.9% of "improvisations" like that lead to failure.
• Mistakes in the early stage come from raw skill, not from wrong theory. Stalling the engine while learning to drive doesn't mean the method of driving is wrong. Don't go hunting for a new system just because you've stumbled on a few trades.
• Missing a trade is an everyday occurrence, on par with getting stopped out and making a profit. Treat it as normal and you can stay calm. Fail to treat it as normal and it breeds regret → bitterness → wanting revenge on the market → reckless trading. Missing a wave doesn't kill you, losing money does.
• Rushing into a trade because "the small timeframe's momentum has run out" is a classic mistake. Momentum running out is only a necessary condition. What's still missing: building support OR increasing buying force OR building an uptrend structure.
• Never expect a distant target when out of phase. Out of phase = lower expectation + raise caution, take whatever the trade gives you.
• Elliott is only for counting waves and reading market psychology, NOT for forecasting, and absolutely not for playing small timeframes. Using Elliott on a small timeframe to enter trades is fatal.
• A direct warning about overtrading: 50 trades in 6 days (~10 trades/day) is a sign that your internal control board has broken down, and you have to stop and self-audit immediately — especially during a stage when the market has no wave.

Related lessons

• Trading rules — the foundation beneath every technique — the base set of rules underlying this diagram (1% of account, only trade BTC, the 4 outcome cases)
• 20 investing rules + the 3 stages of improving your trading — the 20 rules of the "game" that this diagram operates inside
• Notes & trading journal — the process that turns analysis into discipline — how to realize steps 1–3 with pen and paper every day
• Tactical mindset — the process to determine before entering a trade — step 2 in more detail, the "table" technique
• Risk wave vs profit wave (the 80/20 rule) — the 80/20 foundation explaining why you must say NO so often
• Range vs trend tactics — the thinking/tactics/psychology table for the three shapes
• Multi-timeframe (multi-timeframe logic) — the tool for answering steps 1 and 3
• Entry point — step 5 in detail
• Rising momentum / falling momentum (QTT – QTG) — how to read a force reset in step 5
• Moving the stop-loss point — step 6