What is the essence of the market? Sentiment.

The true logic behind profitable trading ultimately comes down to insight into collective psychological expectations, finding that critical point in the battle between support and resistance. This is the core of the trend-following trading method—no prediction, no gambling, only following market consensus.

**Three-layer Cycle Theory: Direction → Position → Entry/Exit**

What is the biggest fear in trading? Starting off with the wrong direction. Therefore, the first step must be to confirm the trend direction on the larger cycle. H4 and daily charts are sufficient; once the trend at these levels is established, it’s hard to overturn in the short term. Trends are relative, but swings are absolute—once the direction is set, the next step is to find the right entry point.

At this stage, the medium cycle comes into play. H1 is a magical cycle; it captures detailed swing changes without being drowned out by noise. On H1, you can see the true support and resistance levels, whether volume is accumulating or diminishing, and whether a breakout is genuine or a false move.

Finally, the specific entry and exit points come into play. M15 and M5 are your precise guidance systems. When the large cycle confirms the direction, the medium cycle identifies the position, and the small cycle is where you execute entries, stop-losses, and take profits. Trend lines, moving averages, Fibonacci sequences—these tools help you pinpoint key points, maximizing your risk-reward ratio.

**Time is also a form of information**

Not every time period is suitable for trading. The European session (15:00-17:00) and the US session (20:30-23:00) are the two most active trading windows. Why? Because during these times, big funds are moving, and consensus is strongest.

Conversely, transition periods and consolidation phases should be avoided. These times are often filled with traps; stop-losses are frequently hit, and profits are slim. Instead of fighting during these periods, wait for opportunities.

**Identify false breakouts; volume is the ultimate lie detector**

This is the most difficult part of trend-following trading. Breakouts can be real or fake, but volume never lies. Breakouts without volume accumulation are often traps for trap traders or trap for short-sellers. When volume supports a breakout, that’s a true signal of momentum release.

For coins like ZEC, which have high volatility, this approach is especially suitable. When you see volume piling up at support levels or volume doubling during a breakout of resistance, that’s a clear signal.

**Follow the trend, observe and verify**

The last principle is the easiest to overlook: don’t make predictions, only follow consensus. Many traders like to position themselves early, betting on a trend. But the market often punishes such speculation. What you should do is observe what the market is actually doing, rather than guessing what it will do next.

Wait until consensus is formed before entering, reducing risk and increasing success rate. It may seem like you’re missing opportunities, but in reality, you’re capturing the safest part of the profit—often the most substantial part.