How can I hold s and press hjkl to move cursor like vim ?
This is a Karabiner thingy. I don’t see any glitchless way to reproduce this with KM.
Yes, I think so. I remap it using ctrl+cmd+h j k l .
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I just accomplished this today without having to use Karabiner.
For that you need to switch to a different mode. There is no feature as 'mode' in KM. So we'd make sure something turns ON or Activates with some keyboard shortcut (let's call it shortcut X) and it turns OFF or deactivate when we press the same shortcut (shortcut X) again.
While our 'thing' is activated, we can use our keyboard shortcuts. For instance, we can make KM to press 'down arrow key' when we are manually pressing 'j key' (to scroll down).
And when our 'thing' is deactivated, manual pressing of j key would only press j key as normal.
This remapping of keys would have a separate macro group. Each macro remapping each desired shortcut.
Outside of this macro group, there would be a separate macro that would have only one action. This action would be to to activate or deactivate the macro group (there is default action in KM to activate or deactivate desired macro group). This macro would have shortcut X as a trigger.
Coming back to the macro group, in options for group, we can make sure we have chosen only specific application/s where these remapped shortcuts would work.
Just tried explaining only with words. Let me know if you'd like me to make a video to explain in detail.
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6 years later
I believe it was Arthur C. Clarke who said, "When a great scientist says something is possible, he is almost always right. When a great scientist says something is impossible, he is almost always wrong."
I used a similar technique to be able to select from a Prompt With List action without having to press Return. One hotkey brings up the list and a second single keystroke makes the choice, automatically followed by Return as the PWL requires.
I enable a group for one action where that group has one macro in it, to follow every keystroke with a Return. That requires the macro to have every possible keystroke defined as a trigger. My first version used enable and disable, like you do here, but that method sometimes accidentally left the macro enabled, which made it very hard to type anything.
I would rather see a working macro, macro groups, etc.
I don't know if that helps. I have been using the excellent macro from @Zabobon. Thanks again 
If I press and hold "4", the letters h, j, k, l, u, space change their function. Release "4" and everything is back to normal. A short tap on "4" types "4". Works perfectly. My eyes always stay on the screen.
True, happens with me as well. For the state/mode to get enabled (as well as to get disabled) I have set up shortcut 'double tapping caps lock key'.
So if and when I realise that the mode is in a different state than desired, i just use the shortcut. My point being, i tried making it easier to switch modes.
If you still think this is something that you'd like to know more in detail, I'll share the screenshots how I did it.
I'm certainly curious, and I'm working on another project where I seem to be running out of mnemonic hotkeys, so having a way to make virtual modifier keys might be a solution worth trying.
And I'm all for people who come up with ideas that push outside the expected boundaries getting some credit for blazing new trails. But I don't want to ask for hours of work by you on my behalf. If you do it, keep it fun. Thanks.
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Sorry I didn't check the forum earlier. Just seeing your comment.
I had already taken and edited screenshots for you. It is pretty simple. I hope you'd understand what I did there based on the screenshot. If still unclear, feel free to ask.
In case you're not aware, we can use 'This device key' option to treat left shift key different than right shift key (similar for option key, command key etc)
I have set up macros with triggers like i tap right command key twice, or left shift key thrice etc
