Many people ask me how to do short-term trading. I believe the core is to master a few basic principles.

**The 5-day Moving Average is a window to observe market temperature**

When I was a beginner, an experienced trader told me that the 5-day moving average reflects the most direct market response. I still strongly agree with this statement. In practice, my approach is: when the price stabilizes above the 5-day moving average, I see it as a sign that the short-term trend is healthy, and this is when I consider entering with a small position. Conversely, if the price closes below the 5-day moving average and fails to recover in the next candle, it’s a warning that the momentum is weakening. I would prioritize reducing my position or exiting to wait rather than betting on a rebound.

But remember, the 5-day moving average is just a tool—used to measure strength and help you set discipline. It’s not a crystal ball; don’t expect it to be 100% accurate.

**What is the most common mistake when bottom-fishing? Entering too early.**

I’ve experienced the mistake of "bottom-fishing halfway up the mountain," and the cost was significant. My understanding is: the true bottom is revealed by the market’s movement, not something you guess in your head.

I pay special attention to two signals: one is a sharp decline in price accompanied by a sudden and extreme decrease in volume, which may indicate that selling pressure is about to exhaust itself. The other is the appearance of classic bullish reversal patterns, such as the Morning Star or Bullish Engulfing, especially near an important historical support level.

Many people rush in because they think it’s "cheap," which is as dangerous as catching a flying knife with bare hands. The safer approach is to wait for the market to show signs of stabilization and a rebound—such as a resistance level turning into a new support—before entering, which is relatively safer.

The essence of trading is a game of probabilities, not gambling.