I am Brother Yuan. I have been in the market for ten years, and I have seen too many 'smart people'. They understand various models, mingle in various circles, and get news faster than anyone. But interestingly, those who end up living well and going steadily are often not them.
I know an old mentor, who can be considered my guide. He doesn't say much, and his tools are simple, but he always manages to avoid the big pitfalls and knows when to take action. In my early years, I asked him for his secret, and he just waved his hand, saying he was 'rather foolish' and only believed in a few old principles. Over the years, I’ve stumbled and made money, and looking back, I realized that his 'foolish methods' are the true backbone of the market. Today, I won't talk about vague concepts; I'll share a few of my deepest feelings, purely personal observations.
1. Quick drops should be avoided, slow drops can be observed.
If the market suddenly crashes down like pouring water, and the rebound lacks strength, something feels off. This usually does not mean money is given to you; instead, big funds are urgently withdrawing. If you feel itchy to catch it at this moment, you will mostly suffer losses. Conversely, if after a big rise, it starts to fall gradually and slowly, with trading volume shrinking sharply, you don’t have to be too anxious. This doesn’t resemble a frantic escape; rather, it looks like someone is secretly picking up cheap chips amidst the chaos. The curtain of the big show might just have opened a corner; there’s no need to rush.
2. The frenzy at a high position may not be the end; the sudden quiet is what’s scary.
Prices are high, trading is active every day, jumping up and down, seeming dangerous, but it indicates fierce competition between bulls and bears, and as long as there are players, the story isn’t over. What we truly need to be wary of is when the price stays there, but the trading volume suddenly vanishes with the market going 'silent'. This indicates that all who should have entered have entered, and nobody outside is willing to take over, just like music stopping abruptly at a ball, lights turning on, and the awkwardness is who? I’ve paid real money for this lesson.
3. The 'flirtation' at the bottom might just be an illusion.
After a long decline, if suddenly a big bullish candle appears with increased volume, many people feel that spring has arrived and rush in. But what’s the result? Often, they end up standing guard as soon as they enter. I value 'continuity' more for true bottom signals. For instance, several days of gentle volume increase and a gradual rise in price center is much more reliable than a single day's 'pulse'. A moment of excitement might be a misunderstanding, but repeated appointments indicate sincerity.
4. Price can tell a story, and volume shows the heartbeat even more.
K-line charts can, to some extent, be 'depicted'. But trading volume, especially real large-scale liquidity, is more like the pulse of the market. A strong and stable pulse may extend the trend; if the pulse is chaotic or weak, you need to think about whether there's a problem with your body. Many data can be embellished, but pretending to have 'volume' on a large scale for a long time is extremely costly and easier to expose.
5. The hardest skill to refine is the ability to 'not do'.
My old mentor once hardly moved for an entire year. Others mocked him for missing countless 'opportunities', but he just smiled without speaking. Later, it proved that he avoided numerous pitfalls. In a noisy market where you can't understand or grasp, controlling your hands and daring to wait in cash is the kind of composure that allows you to stay at the table until the end. Without orders in hand, the mind stays clear.
In the end, I also learned from him to stick a few plain words next to the screen:
Be scared during a quick drop, be patient during a slow drop.
High volume at high positions can be observed; low volume at high positions means to run quickly.
A sudden surge in a single day holds many traps; continuous volume reveals true feelings.
Charts can be drawn, but volume is hard to deceive.
Holding on is a skill; being in cash is a practice.
Rough words can carry some truth; these insights are earned through time and lessons. The market is always changing, but some of the most basic human nature laws and intentions of capital keep repeating. Whether you dare to be a little 'foolish' like this depends on yourself.
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