To be honest, at the beginning, he was no different from you—always thinking that making money relies on news and luck, following this signal today and that hot topic tomorrow, his account was like a roller coaster, unable to hold onto profits while stubbornly enduring losses.
Later, I chatted with him a few times and shared some of my own lessons learned from pitfalls. At first, he didn't believe me and thought I was lecturing him. But after actually applying it, he realized that making money isn't about having extraordinary skills, but about not making foolish mistakes.
1. Don't rush to run when there's a sharp rise; the market often experiences a 'false end'.
Once, a big candlestick suddenly appeared, and he was eager to sell, so he came to ask me. I told him not to move, because if such a sharp rise is followed by a slow decline, it is mostly the main force trying to scare people into selling; if you run away, you are essentially handing over your shares.
He held on with skepticism, and the next day, it continued to rise and took off directly. Later he told me, 'At that moment, I understood that the biggest fear for the operator is someone who can hold on.'
2. Don't rush to buy during a sharp drop; a weak rebound is a trap.
Another time, the market suddenly crashed, and he excitedly rushed in to buy the dip, only to find himself halfway up the hill. The price bounced slightly and then flattened, continuing to drop.
I told him: a sharp drop is not scary; what’s scary is a weak rebound. If the price can’t rise, it means there’s no real capital wanting to buy; those are all traps, so don't reach out.
3. The top is not seen when volume expands but when 'no one is talking anymore'.
Many people think that high volume at a peak means it's the top, but the real danger is when the market slowly declines and no one is discussing it.
I advised him to pay attention to market sentiment: being lively doesn't necessarily mean danger; the quietness like a graveyard at midnight is the most frightening. Later, he learned to decisively reduce his positions when the market suddenly became 'silent', avoiding several waves of decline.
4. The bottom is not seen when there's volume on one day, but when there's continuous accumulation of volume.
He used to like guessing bottoms, thinking that when he saw increased trading volume one day, it meant the bottom had been reached. As a result, he often bought too early.
I told him not to rush; the bottom is something you walk out from. The day you see gentle volume expansion for more than three consecutive days, and the price isn't dropping much, that's a signal that the main force is slowly accumulating positions.
5. Don't be fooled by indicators; what you really need to watch is volume and sentiment.
He previously had a bunch of indicators on the screen: MACD, KDJ, RSI… dazzling.
I cleared his interface, leaving only candlesticks and trading volume. I told him that understanding the inflow and outflow of funds and public sentiment is more important than anything else. Fancy indicators are either lagging or distracting; don't complicate simple matters.
6. The most ruthless move: stay in cash.
Once, during a market fluctuation with unclear direction, I told him to clear his positions and wait a week. At that time, he scolded me for being too conservative, thinking he would miss opportunities.
As a result, that week the market fluctuated back and forth, and he wasn't hurt. By the eighth day, when the direction became clear, he went all in and captured the entire segment of profits. Since then, he has never been afraid of 'missing out'.
These six points, to be honest, are not difficult at all.
But the difficulty lies in execution, in controlling one's greed and fear when the market starts to rise.
My brother was able to turn things around, not because he was particularly gifted, but because he realized that the real reason for losing money was never the market, but his own impulsive actions.
If you can also execute these hard rules well, then why can't you be the next one to turn things around?
