Why can’t you always hold onto profits, yet you stubbornly hold on even when you’re losing? Why do you see the right direction, but panic when the market pulls back? Why does it drop when you buy and soar when you sell? Where is the problem? Actually, it's not that you don’t know how to trade; you’re just too afraid of losing money. This fear has long been discussed in Dow Theory. Today, I’ll clarify it for you and tell you how to overcome it. The first core essence of Dow Theory is that most people fail in trading not because they don’t understand candlestick patterns, but because they don’t grasp the levels of trends. Do you think the market is a straight line? It’s not. The market is actually a three-layer nested system: the main trend, the secondary trend, and short-term fluctuations. It sounds abstract, so let me give you a visual. The main trend is like driving from Beijing to Shanghai; that’s the direction, and it must never be wrong. The fourth-level trend is like stopping for gas or taking a detour along the way. Short-term fluctuations are the traffic lights and stops you encounter on your journey. If you want to make money, whether it’s a red light or a detour, you must not operate against the main trend. However, the reality is that 90% of people walk away when they encounter short-term fluctuations. Others think the weather is about to change and, thinking they’re smart, either miss gains or make the wrong move. So when you open the market data, the first thing to do is not to look for buy or sell points, but to ask yourself: is the main trend currently heading south or north? At this point, I know many will ask how to judge whether this main trend is reliable. It’s simple: just look at two things, new highs and higher lows. It’s like driving uphill; as long as your car keeps reaching new heights, and after each bump, the lowest point of your wheels is higher than the last, it indicates that the main trend is developing healthily. So from today onwards, focus on the most important low point on your chart. As long as the next pullback does not break this position, your main trend is safe, and you should hold onto it, without scaring yourself. Do you think that as long as the price breaks through, it’s safe? Wrong. The real market makers never just shout slogans; they need to put their money where their mouth is. Therefore, the second essence of Dow Theory is that trading volume must validate the trend. This statement absolutely helps you avoid pitfalls because for a trend to last, it needs continuous funding, which means support from trading volume. Just shouting slogans without any money being put in is self-indulgence and destined to go nowhere. So from today onwards, when you see the price breaking through a key level, don’t get excited. At this point, check the trading volume. If it’s a higher trade volume breakout, then it’s the real deal; if it’s a low volume breakout, it’s mostly a trap. Better to miss out than to make a mistake. Now that you can see this, I believe you have made great progress. You've learned two cores of Dow Theory: distinguishing primary and secondary trends and the relationship between volume and price. It can greatly help you capture trends and identify traps. Although Dow’s thinking is very clear, have you ever thought about a question? Why do some people memorize Dow Theory perfectly but still can’t control their hands or hold onto positions when it comes to real trading? Because knowing the theory is just the beginning. When to turn the theory into your own system and then train to turn that system into unshakeable muscle memory is what truly counts as mastery; this is a process.

In fact, understanding and practicing are two different things. Everyone has good comprehension skills, but those who have practiced can overcome inner barriers through real feedback. Only by practicing can one achieve tangible results. Therefore, the harsh reality of trading is that if you are given a martial arts manual and practice randomly on your own, you won’t be able to achieve anything. Although we don’t have a secret to getting rich overnight, we do have a solid training system that can transform theory into muscle memory, helping to overcome inner obstacles and completely break free from the retail behavior pattern of relying on feelings and luck. This path may be exhausting, but once you have gone through it, it is worth it for a lifetime.