Recently, someone asked me about trading logic, so I decided to write down the core idea.

To put it simply, the fundamental principle of technical analysis is one sentence: an uptrend is characterized by higher highs and higher lows, while a downtrend has lower highs and lower lows. This logic is extremely simple, but very few people can actually use it well.

My trading approach is also quite straightforward. For long positions, I enter at lows, and if the price breaks below that low, I cut my losses. For short positions, I enter at highs, and if the price breaks above that high, I stop out. No need to look at smaller timeframes or get involved in complicated stuff—it's that simple. Of course, if your skills are strong enough, you can combine smaller timeframes to optimize the risk-reward ratio, but the basic logic remains the same.

As for tools, I often use AVWAP. This tool clearly shows the average cost basis of the trend and where the lows are. Setting it up is simple—just place it at key lows or at the start of a trend. TradingView has this tool built-in, so just use it directly.

Honestly, I dislike those long-winded people in the trading community. Their logic is often flawed, so they need to use a lot of nonsense to cover it up. The truly profitable strategies are simple and efficient—it's that straightforward.

Recently, I’ve been applying this approach to BTC and ETH, and the results are pretty good. If you're interested, check out the trends of these two assets on Gate and try to understand the practical application of higher lows and higher highs yourself.