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At this point, I assume we have a fundamental understanding of what defines a trend and an oscillation. Let us now delve into the two primary techniques that traders typically employ when creating trading models. These two methods constitute the most basic approaches utilized by traders in developing their models, and involve the utilization of the most rudimentary market data. Moreover, they are immensely instructive for the general investor. It is worth noting that in this section, I will not be addressing the analysis of fundamental data as it is challenging to elucidate succinctly in a book. This is because fundamental data can be construed from varying viewpoints, and there is a significant degree of subjectivity involved.
（A） By using a particular observation period, we can classify market movements into two categories: trends and sideways movements.
To divide market trends into trends and Sideways Movement within a specific period, the first step is to establish the observation area, as previously mentioned. However, it is not recommended to use too many periods, as conflicts may arise between different periods. For instance, if the past 50 K-lines in a 5-minute period show a downtrend while the past 50 K-lines in a 1-hour period show an uptrend, it can be challenging to decide whether to buy or sell. Waiting until all periods show the same trend direction before trading is impossible. Therefore, it is better to simplify and only look at one period.
Once the specific period is determined, experienced traders can use the knowledge mentioned earlier to identify market trends. If the market belongs to a trend, use a trending trading model; if it belongs to a sideways movement, use a Range-bound trading model. However, if the market suddenly changes from a trend to a Sideways Movement while using a trend trading model, experienced traders should stop trading immediately and wait for the next trading opportunity. This can be challenging because many people continue trading until they make a profit, which can lead to losses.

（B）Understanding Market Trends: The Importance of Observation and Differentiating Between Large and Small Trends
In this approach, all market fluctuations are viewed as either trends or Sideways Movement. This model is relatively straightforward, with the sole emphasis on trading trends or Sideways Movement. In the end, trends and Sideways Movement can vary in size, and even in volatile markets, altering the observation period can make it appear as though there is a trend or Sideways Movement present. The chart below serves as an illustration of this concept.
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