Based on Xiaoxiao Xinba (潇潇新八), 百箭穿杨 (Hundred Arrows Hit the Mark: Technical Trading Methodology for A-Shares)
Hundred Arrows (百箭穿杨) presents a technical trading methodology specifically designed for the A-share market. The title evokes the precision of an expert archer — every arrow (trade) should be deliberate, well-aimed, and executed with confidence. The book emphasizes that in trading, as in archery, mastery comes from thousands of repetitions of correct technique, not from luck or inspiration.
Core thesis: Profitable trading requires precise entry and exit points derived from candlestick patterns, volume-price relationships, and strict discipline. Vague "buy low, sell high" thinking is worthless; you need specific, repeatable signals.
Key principles:
The methodology is designed for:
Preparation (70% of effort):
→ Study the market, identify setups, prepare orders
→ Like an archer preparing the bow: stance, grip, aim
Execution (20% of effort):
→ When the setup triggers, act decisively without hesitation
→ Like releasing the arrow: smooth, committed, final
Review (10% of effort):
→ Analyze the outcome, refine the technique
→ Like an archer studying where the arrow landed
A central concept in the book is understanding "main force" (主力) — institutional traders, major shareholders, or coordinated players who move stock prices:
| Phase | Main Force Action | Retail Trap |
|---|---|---|
| Accumulation (吸筹) | Quietly buying; keeping price flat or slightly declining | Retail sells out of boredom |
| Shakeout (洗盘) | Sharp drop to scare weak holders into selling | Retail panic-sells at the low |
| Markup (拉升) | Driving price higher rapidly | Retail chases after the move is underway |
| Distribution (出货) | Selling into strength, creating appearance of continued rise | Retail buys at the top thinking it will go higher |
Key insight: Volume-price analysis reveals the main force's intention. The goal is to align with the main force, not fight it.
| Timeframe | Chart | Holding Period | Best For |
|---|---|---|---|
| Ultra-short (超短线) | 5-min, 15-min, 60-min | 1-3 days | Experienced traders only; requires real-time monitoring |
| Short-term (短线) | Daily, 60-min | 3-10 days | Core methodology in this book |
| Medium-term (中线) | Daily, weekly | 10-30 days | Lower frequency; larger moves |
Bullish single candles (看涨单K):
| Candle | Description | Significance |
|---|---|---|
| Long green body (大阳线) | Close >> Open; > 5% range | Strong buying power; often signals start of up-move |
| Green marubozu (光头光脚阳线) | Open = Low, Close = High | Maximum buying aggression; powerful bullish signal |
| Hammer (锤子线) | Small body at top, lower shadow ≥ 2x body | Selling rejected; potential reversal at support |
| Inverted hammer at bottom (底部倒锤子) | Small body at bottom, upper shadow ≥ 2x body | Buyers testing higher; potential reversal signal |
| Green candle with gap up (跳空高开阳线) | Opens with gap above prior close, closes higher | Strong momentum; gap may act as support |
Bearish single candles (看跌单K):
| Candle | Description | Significance |
|---|---|---|
| Long red body (大阴线) | Open >> Close; > 5% range | Strong selling pressure; often signals start of decline |
| Red marubozu (光头光脚阴线) | Open = High, Close = Low | Maximum selling aggression; powerful bearish signal |
| Shooting star (射击之星) | Small body at bottom, upper shadow ≥ 2x body | Buying rejected at highs; reversal at resistance |
| Hanging man (上吊线) | Small body at top, long lower shadow, at market high | Despite recovery from lows, selling pressure emerging |
Reversal patterns at bottoms:
Morning Star (早晨之星):
Day 1: Large red candle (decline)
Day 2: Small body (star) — gap down from Day 1
Day 3: Large green candle — closes above midpoint of Day 1
Conditions for validity:
1. Must appear after a decline of at least 5 days
2. Day 2 volume should be lower than Day 1
3. Day 3 volume should be higher than Day 2
4. More reliable at known support levels
Bullish Engulfing (看涨吞没):
Day 1: Red candle
Day 2: Green candle — body completely engulfs Day 1's body
Conditions for validity:
1. Must appear after a decline
2. Day 2 volume significantly higher than Day 1
3. Day 2 close above Day 1 high is stronger signal
4. The larger the engulfing candle, the more powerful
Three Consecutive Green Soldiers (红三兵):
Day 1-3: Three consecutive green candles with higher closes
Each opens within prior candle's body, closes at/near high
Conditions for validity:
1. Each candle's body should not shrink significantly
2. Volume should be steady or increasing
3. Upper shadows should be minimal
4. If bodies shrink and shadows grow → "three soldiers advancing cautiously" (less reliable)
Reversal patterns at tops:
Evening Star (黄昏之星):
Day 1: Large green candle (advance)
Day 2: Small body (star) — gap up from Day 1
Day 3: Large red candle — closes below midpoint of Day 1
Validation: Volume spike on Day 3 increases reliability
Dark Cloud Cover (乌云盖顶):
Day 1: Large green candle
Day 2: Opens above Day 1 high, closes below midpoint of Day 1 body
Validation: The deeper the penetration, the more bearish
| Pattern | Description | Trading Action |
|---|---|---|
| Rising three methods (上升三法) | Large green, 3 small reds within its range, large green | Buy on close of 5th candle |
| Falling three methods (下降三法) | Large red, 3 small greens within its range, large red | Sell/short on close of 5th candle |
| Ascending triangle (上升三角形) | Flat resistance, rising support | Buy on breakout above resistance |
| Flag consolidation (旗形整理) | Price drifts down in narrow channel after sharp rise | Buy when price breaks above flag |
| Price Action | Volume Action | Interpretation | Trading Implication |
|---|---|---|---|
| Price up ↑ | Volume up ↑ | Healthy advance, strong buying | Hold or add to longs |
| Price up ↑ | Volume down ↓ | Advance on thin air, weakening | Prepare to take profits |
| Price up ↑ | Volume extreme spike | Climax buying, possible blow-off top | Sell signal if at resistance |
| Price flat → | Volume up ↑ | Accumulation or distribution (depends on level) | Watch for breakout direction |
| Price flat → | Volume down ↓ | No interest; consolidation | Wait for volume to return |
| Price down ↓ | Volume up ↑ | Panic selling or distribution | Bearish; stay out or sell |
| Price down ↓ | Volume down ↓ | Selling exhaustion | Potential bottom forming; watch for reversal candle |
| Price down ↓ | Volume extreme spike | Capitulation selling | Often marks the final low; contrarian buy zone |
Accumulation phase (吸筹阶段):
Pattern: Price trading in a range; volume occasionally spikes on
down-days but price recovers quickly. Over time, volume on up-days
gradually increases while volume on down-days decreases.
Volume signature:
┌─ Spike on dip (buying the dip)
│ ┌─ Lower volume on subsequent dips
↓ ↓
■■■ ■■ ■■■■ ■ ■■■■■
=== == ==== = ===== ← price range stays tight
Interpretation: Main force is accumulating shares quietly.
Action: Begin watching; prepare for entry on breakout.
Shakeout phase (洗盘阶段):
Pattern: Sudden sharp decline (3-5%) on relatively moderate volume,
followed by quick recovery. Lower shadow candles. Volume dries up
after the shakeout.
Volume signature:
■■■■■ (moderate volume on dip)
■■ (very low volume on recovery)
Key tell: If volume on the shakeout is NOT significantly higher than
recent average, the decline is a shakeout (fake), not distribution (real).
Action: BUY on the shakeout recovery — this is a prime entry point.
Distribution phase (出货阶段):
Pattern: Price at or near highs. Frequent large green candles attract
buying, followed by gaps down. Volume is consistently heavy.
Price fails to make meaningful new highs despite high volume.
Volume signature:
■■■■■■ ■■■■■■ ■■■■■■ ← persistently high volume
────── ────── ────── ← price going sideways at highs
Key tell: Volume stays high but price stops advancing.
This is the main force selling into retail buying.
Action: SELL. Do not be fooled by occasional big green candles.
| Divergence | Description | Reliability |
|---|---|---|
| Bearish divergence (顶背离) | Price makes new high, volume does NOT | High — major sell signal |
| Bullish divergence (底背离) | Price makes new low, volume does NOT (shrinking) | High — major buy signal |
| Volume leads price (量在价先) | Volume spikes before price moves | Medium — direction uncertain; watch next 1-2 days |
| Fake breakout detection | Price breaks resistance but volume < 1.5x average | High — likely false breakout; avoid |
Entry Pattern 1: Shakeout Recovery Buy (洗盘回升买点)
Setup: Stock in uptrend → sudden 3-5% drop on moderate volume →
hammer or bullish engulfing candle next day → volume dries up
Entry: Buy at close of recovery candle or next morning open
Stop: Below the shakeout low
Target: Prior high + 5%
Risk/reward: Typically 1:3
Entry Pattern 2: Breakout on Volume (放量突破买点)
Setup: Stock consolidating 10+ days → price breaks above range high
with volume > 2x 20-day average
Entry: Buy at breakout price or first pullback to breakout level
Stop: Below consolidation midpoint
Target: Measured move (range height added to breakout)
Risk/reward: Typically 1:2
Entry Pattern 3: Gap-Up Hold Buy (跳空高开不回补买点)
Setup: Stock gaps up 2-3% at open → holds above gap level for
first 30 minutes → does NOT fill the gap by 10:30 AM
Entry: Buy at 10:30 AM if gap not filled
Stop: Below the gap level
Target: Open price + the gap distance (measured move)
Risk/reward: Typically 1:2
Entry Pattern 4: Support Bounce Buy (支撑位反弹买点)
Setup: Stock in uptrend pulls back to key support level
(60MA, prior breakout level, or horizontal support)
→ bullish candle at support → volume shrinks during pullback
Entry: Buy at close of bullish reversal candle at support
Stop: Below the support level (2-3% below)
Target: Prior swing high
Risk/reward: Typically 1:3
Entry Pattern 5: Morning Star Bottom Buy (早晨之星底部买点)
Setup: After decline of 5+ days → three-candle morning star pattern
→ at a known support level (MA, price level, Fibonacci)
Entry: Buy at close of 3rd candle (large green) or next morning
Stop: Below the star (Day 2) low
Target: Measure from star low to Day 3 close, project upward
Risk/reward: Typically 1:2 to 1:3
Before executing any entry:
□ Market trend: favorable (above 60MA) OR at least neutral
□ Entry pattern: one of the five patterns clearly formed
□ Volume confirmation: matches expected volume signature for the pattern
□ Key level context: entry at/near support OR breakout above resistance
□ No earnings in next 5 trading days
□ No gap risk (Friday afternoon entries avoided)
□ Stop-loss price identified and calculated
□ Position size calculated per rules (Section 7)
□ Risk/reward ratio ≥ 1:2
□ Not already at maximum positions
□ Emotional state: calm and analytical (not excited, not fearful)
| Stop Type | Definition | When to Use |
|---|---|---|
| Pattern stop | Below the low of the entry pattern | Primary stop for all pattern-based entries |
| MA stop | Close below the key MA that defined the trend (20MA or 60MA) | For trend-following positions |
| Percentage stop | -5% from entry (short-term) or -8% (medium-term) | Backup if pattern stop is wider |
| Time stop | No profit after 5 trading days (short-term) or 15 days (medium-term) | Prevents capital from being tied up in dead trades |
| Intraday stop | If position drops -3% within first day | Early cut for entries that immediately go against you |
The Three-Tier Exit System:
Tier 1: Take 30% off at first resistance level or +8% profit
→ This locks in "base camp" profit
→ Raise stop to breakeven on remaining 70%
Tier 2: Take 30% off at second resistance level or +15% profit
→ Now you are "playing with house money"
→ Trail stop at most recent swing low for remaining 40%
Tier 3: Exit remaining 40% when:
→ Trailing stop is hit
→ Bearish reversal candle at resistance
→ Volume divergence (new high on lower volume)
→ Evening star or other topping pattern
Sell the entire position immediately if:
Total trading capital: 100%
Division:
Position 1 (核心仓): 25-30% — highest conviction trade
Position 2 (辅助仓): 15-20% — secondary trade
Position 3 (辅助仓): 15-20% — tertiary trade
Reserve (机动仓): 15-20% — for adding to winners ONLY
Cash buffer (安全垫): 15-20% — never invested; psychological safety net
| Signal Strength | Position Size | Criteria |
|---|---|---|
| A-grade (strong) | 25-30% of trading capital | All 5 confirmation criteria met; R:R > 1:3 |
| B-grade (moderate) | 15-20% | 4 of 5 criteria met; R:R > 1:2 |
| C-grade (speculative) | 8-10% | 3 of 5 criteria met; R:R > 1:2 |
| Below C-grade | 0% (no trade) | Fewer than 3 criteria met |
Adding to winners (加仓):
Reducing positions (减仓):
Per trade maximum loss: 2% of total capital
Per day maximum loss: 3% of total capital
Per week maximum loss: 5% of total capital
Per month maximum loss: 8% of total capital
If monthly limit is hit:
1. Close all positions
2. Stop trading for 5 trading days minimum
3. Review every trade in the journal
4. Identify the pattern causing losses
5. Paper trade for 5 more days to rebuild confidence
6. Resume live trading with HALF normal position sizes
7. Return to full size only after 3 profitable trades
Layer 1: Pre-Trade Risk Control
Layer 2: During-Trade Risk Control
Layer 3: Post-Trade Risk Control
Green Light (绿灯) — Full trading mode:
Market above rising 20MA and 60MA
Breadth: > 60% of stocks above their 20MA
Sentiment: Normal (not extreme greed or fear)
→ Trade with full position sizes
Yellow Light (黄灯) — Cautious trading:
Market between 20MA and 60MA; MAs converging
Breadth: 40-60% of stocks above their 20MA
Sentiment: Uncertain
→ Trade with half position sizes; require A-grade signals only
Red Light (红灯) — No new trades:
Market below declining 60MA
Breadth: < 40% of stocks above their 20MA
Sentiment: Fear or complacency at lows
→ Cash only; watch for bottom signals
Pre-market (8:30-9:15 AM):
1. Check overnight news for any held positions
2. Review global markets (US, Hong Kong) for A-share impact
3. Check pre-set alerts and orders
4. Review today's plan from last night
Market hours (9:30 AM - 3:00 PM):
9:30-9:45: Observe opening action; do NOT trade in first 15 minutes
9:45-10:30: Execute morning entries if signals trigger
10:30-11:30: Monitor positions; scan for developing patterns
13:00-14:00: Afternoon scan; identify afternoon entry candidates
14:00-14:45: Execute afternoon entries
14:45-15:00: Final position review; set overnight stops
Post-market (3:00-4:00 PM):
1. Update trading journal with all actions
2. Check volume and candlestick patterns for all held stocks
3. Scan watchlist for tomorrow's potential setups
4. Write tomorrow's trade plan: specific stocks, prices, actions
5. Set alerts and orders
| Rule | Rationale |
|---|---|
| Never trade when angry or euphoric | Extreme emotions override analytical thinking |
| Set daily screen time limit: 4 hours | Beyond 4 hours, pattern recognition accuracy declines |
| Physical exercise before market open | Improves focus, reduces anxiety |
| No position changes during lunch break | 13:00 open is volatile and misleading |
| Celebrate process, not outcome | A good trade that loses money is better than a bad trade that makes money |
| Accept uncertainty | You cannot know the outcome; you can only control your process |
| Mistake | Description | Fix |
|---|---|---|
| Forcing trades | Trading when no clear setup exists | Maintain minimum signal criteria; empty days are acceptable |
| Moving stop-losses | Lowering stop after entry because "it will come back" | Pre-commit: write stop on paper before entering; execute mechanically |
| Ignoring volume | Entering breakouts without volume confirmation | Volume is mandatory; no volume = no trade |
| Overanalyzing | Using 10+ indicators that give conflicting signals | Limit to: candles + volume + MAs + one support/resistance method |
| Trading the open | Buying/selling in the first 15 minutes on emotion | Wait until 9:45 AM at earliest; let the opening noise settle |
| Revenge trading | After a loss, immediately entering to "win it back" | Enforce cooling period: minimum 1 hour after any loss before new entry |
| Holding over weekends unnecessarily | Keeping positions through weekend news risk | If profit is thin and trend is uncertain, close Friday afternoon |
| Ignoring market context | Buying individual stocks in a falling market | Always check market "traffic light" before any entry |
| Position too large | Going "all in" on a single trade | Maximum 30% per position; use the capital division framework |
| Abandoning the system after a few losses | Switching methods every month | Every system has drawdowns; trust the statistics over 50+ trades |
Date: Tuesday evening chart review
Stock: C (semiconductor sector)
Technical situation:
- 15-day consolidation range: ¥28.50 - ¥31.00
- 60MA at ¥27.80, rising → uptrend confirmed
- Volume during consolidation: shrinking steadily
- 20MA catching up to price (converging with 5MA and 10MA)
- Prior trend: up 35% in 2 months before consolidation
Market context:
- CSI 300: above rising 60MA → Green Light
- Semiconductor sector: 3 of 5 sector stocks showing similar consolidations
Assessment: "Breakout on volume" pattern forming
Plan: Buy if price breaks above ¥31.00 with volume > 2x 20-day average
Stop: ¥28.50 (consolidation low) → risk = ¥2.50 per share
Target: ¥31.00 + (31.00 - 28.50) = ¥33.50 minimum (measured move)
R:R = ¥2.50 target / ¥2.50 risk = 1:1 minimum; likely 1:2+ if trend continues
Wednesday 10:00 AM:
Stock opens at ¥30.80 (in range, no action yet)
By 10:00: Rises to ¥31.20 → above ¥31.00 resistance ✓
Volume at 10:00: Already 60% of 20-day full-day average → strong ✓
Confirmation checklist:
□ Market green light ✓
□ Breakout pattern ✓
□ Volume confirmation ✓
□ At resistance breakout point ✓
□ No earnings next 5 days ✓
Signal grade: A (all criteria met)
Execution:
Buy 3,000 shares at ¥31.20
Position size: ¥93,600 (25% of trading capital — A-grade sizing)
Stop-loss: ¥28.50
Risk per share: ¥2.70
Total risk: ¥8,100 (2.2% of total capital) ✓ (< 2.5% limit)
Day closes at ¥31.80, volume = 2.8x 20-day average → excellent confirmation
Day 2 (Thursday):
Opens ¥32.00, high ¥32.50, close ¥32.20
Volume: 1.8x average (declining from Day 1 but still elevated)
Action: HOLD. Raise mental stop to ¥30.00 (below yesterday's low)
Day 3 (Friday):
Opens ¥32.50, pulls back to ¥31.50 intraday, closes ¥32.00
Volume: 1.2x average (normal)
Pullback to breakout zone and held → healthy retest
Action: HOLD. Friday close is fine; no weekend risk concern at this profit level (+2.6%)
Day 5 (Tuesday):
Opens ¥32.20, rallies to ¥33.50 on sector news
Volume: 2.5x average → fresh buying
Profit at high: +7.4%
Action: Tier 1 partial sell
→ SELL 1,000 shares at ¥33.50 (1/3 of position)
→ Raise stop on remaining 2,000 shares to ¥31.20 (breakeven)
Day 8 (Friday):
Stock at ¥35.00. Profit on remaining: +12.2%
Volume: declining over last 2 days → caution signal
Action: Tier 2 partial sell
→ SELL 1,000 shares at ¥34.80
→ Trail stop on remaining 1,000 shares to ¥33.00 (below Day 5 swing low)
Day 11 (Wednesday):
Stock opens ¥35.50, rallies to ¥36.20
Then reverses: shooting star candle forming by 14:00
Volume at 14:00: 3x average (highest of the move) → possible blow-off
Shooting star at resistance + extreme volume → SELL signal
Action: SELL remaining 1,000 shares at ¥35.50
Trade Summary:
Sell 1: 1,000 × ¥33.50 = ¥33,500
Sell 2: 1,000 × ¥34.80 = ¥34,800
Sell 3: 1,000 × ¥35.50 = ¥35,500
Total received: ¥103,800
Total cost: ¥93,600
Gross profit: ¥10,200 (10.9%)
Holding period: 8 trading days
Journal notes:
- Entry was textbook breakout on volume ✓
- Tier system locked in profits progressively ✓
- Recognized volume blow-off signal for final exit ✓
- Could have held longer if no blow-off signal appeared
- Grade: A trade — followed all rules
"百箭穿杨不是靠运气，而是靠重复正确的动作一千次。" — Hitting the mark a hundred times is not luck — it is repeating the correct action a thousand times.
"量是骗不了人的。价格可以被操纵，但成交量永远诚实。" — Volume cannot lie. Price can be manipulated, but volume is always honest.
"没有成交量配合的突破，都是假突破。" — A breakout without volume confirmation is a false breakout.
"进场之前先想好怎么出场。如果你不知道怎么止损，就不应该进场。" — Before entering, first decide how to exit. If you do not know your stop-loss, you should not enter.
"等待不是浪费时间，等待是最重要的交易技能。" — Waiting is not wasting time; waiting is the most important trading skill.
"主力吃肉，散户喝汤。但大多数散户连汤都喝不到，因为他们总在主力出货时进场。" — The main force eats the meat, retail gets the soup. But most retail investors do not even get soup because they always enter when the main force is distributing.
"一个月不交易也是一种交易策略。" — Not trading for an entire month is also a trading strategy.
"止损是交给市场的学费。不愿交学费的人，最终会被市场没收全部本金。" — Stop-losses are tuition paid to the market. Those unwilling to pay tuition will eventually have their entire principal confiscated.
"技术分析是工具，纪律是灵魂。没有纪律的技术分析，就像没有瞄准的射箭。" — Technical analysis is the tool; discipline is the soul. Technical analysis without discipline is like archery without aiming.
"赢家和输家的区别不在于胜率，而在于赢的时候赚多少，输的时候亏多少。" — The difference between winners and losers is not win rate but how much they make when they win and how little they lose when they lose.