When prices drop, dare to buy the dip; when prices rise, why run from strong stocks? What exactly is the hidden rhythm of the main force?
Many people have this strange phenomenon when trading stocks: they are bold and dare to buy the dip when prices fall; but when prices rise, they can't hold onto strong stocks and watch their profits fly away. Why is that? Simply put, it's because they don't understand how the main funds operate. If you want to improve your stock trading success rate, you need to grasp and implement the following three points, and you will be able to surpass 85% of retail investors!
First, you need to distinguish between adjustments and declines, and don't blindly buy the dip. You need to establish a method to judge the bottom; before the market shows obvious signs of stopping the decline, don't rush in. A common mistake many people make is to take a small rebound during a decline as the end of the adjustment and hastily buy the dip, resulting in being heavily trapped. Real bottom buying requires waiting until the market stabilizes.
Second, after the stock price breaks through a key position, keep a close watch on the trend and identify strong signals. If the stock price breaks through an important resistance level, you need to focus on how it moves next. If, after the breakout, there isn't a significant pullback, or if a series of small upward candles slowly rise, that's a typical strong performance. At this point, you should hold onto the stock firmly and not panic and sell just because you've made a little money.
Third, you need to understand the trends of strong stocks and grasp the rhythm of the limit-up relay. The limit-up relay is a common method for the main force to boost stock prices, and the price divergence during the process is a key observation point. Don't always think that stocks will hit the limit-up every day; strong stocks often rise in a fluctuating manner. During the divergence phase, you need to discern which stocks are genuinely strong and which are falsely strong, so you can avoid selling too early and letting go of strong stocks.
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