How to Determine the Starting Point of a Major Market Cycle? (Original)

From a technical perspective, using EMA200 and RSI
First, the conclusion: the most cost-effective accumulation window during a cycle is when the K-line is below the EMA200; invest regularly.
This is a long-term strategy. By investing regularly below the EMA200, the average cost will be relatively low. Once the market reverses, the long-term return potential is enormous!
Your trading is your business.
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Now, let's look at the current K-line trend. Under the weekly level premise, combining EMA200 and RSI—what's the clever part?
1. EMA200 is a long-term trend indicator. I believe its greatest value lies in determining the starting point for spot position building.
When the K-line is below the EMA200 (yellow area in the chart), it’s an ideal time for regular investment. The advantage is that the average cost is low, and once the market reverses, the long-term returns are significant.
When EMA200 crosses below the K-line from above (white arrow), it may entangle with the K-line for a period. During this interval (purple area in the chart), it’s a strong signal that the market is about to reverse. At this point, you should increase your positions, which also means the window for accumulating the most cost-effective chips is gradually closing.
As the K-line moves above the EMA200 and the gap widens, gaining momentum, it indicates a new cycle has begun! Later investors who are slow to react will find it hard to catch big gains, or may even get hurt, because the price advantage is shrinking and they missed the optimal entry point.
2. RSI, combined with the 50 line, acts as a boundary between bullish and bearish trends. The exchange doesn’t display this directly; I’ve marked it with a dashed line in the chart below.
What makes this indicator good? The 9, 12, and 24 periods represent short-term, mid-term, and long-term trends. When they appear together in one indicator and are combined with the 50 line, it’s easy to see the short, medium, and long-term trend directions at a glance. This is something other indicators lack.
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Here (weekly level), I use RSI as a confirmation for EMA200. Why?
Because the truth is: EMA200 is very similar to RSI’s 50 line.
1. When RSI (24) hovers below the 50 line and approaches 30, it indicates a continuation of the bear trend and oversold conditions. This resonates with the behavior of EMA200.
Subsequently, as RSI (9) and (12) return to around 30 and oscillate upward toward 50, the price continues to fluctuate downward, showing a cycle bottom divergence (white arrow). (corresponds to yellow area) This is an ideal time for regular investment.
2. In the initial phase of reversal, when RSI (9), (12), and (24) lines return near the 50 line, form a golden cross, and show bullish expansion, the price jumps above EMA200 and exhibits repeated entanglement patterns. (corresponds to purple area) This is the time to increase positions, synchronized with EMA200: the window for accumulating the most cost-effective chips is gradually closing.
3. As the bullish trend unfolds, the K-line steadily runs above EMA200, and the distance between them gradually widens. During this process, the price and RSI form a bearish divergence at the top. (white arrow)
4. When the price re-enters below EMA200 and RSI remains below the 50 line for an extended period, it confirms continued bearishness and oversold conditions. Both are resonating.
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The cycle is a system of opening and closing, repeating endlessly. In execution: take profits at high levels, build positions at low levels.
The theory is simple, but where is the difficulty? The difficulty lies in the unity of knowledge and action.
A new year, let’s encourage each other.