How to trade a B-wave rebound? Is it advisable to participate in spot trading?
As mentioned before, the B-wave is a corrective wave, which is the most difficult phase to trade. The timing and pattern are uncertain, and signals change rapidly.
A corrective wave is, after all, a corrective wave, not a driving wave. After the correction, a driving wave will follow, and driving waves are downward.
If your trading skills are not strong, it's not recommended to buy spot at this stage. It's not worthwhile. Even if the previous analysis is correct, and the B-wave hasn't ended and there's still room for new highs, the current position has already moved at least 50%. What if the market doesn't follow this analysis? Entering spot trading will likely result in significant losses. Not all price swings are suitable for participation; some seemingly "opportunistic" opportunities should be missed.
Even if you believe you have the skills to participate in spot trading, you must consider the worst-case scenario. What if the market doesn't move as expected and makes new lows? How should you exit? These contingency plans must be in place before entering the market, not after you're already trapped.
In the remaining phase, Yiming plans to participate in: buying contracts on dips, but this requires confirmation of the chart pattern. Currently, no signal has appeared, and even if it's missed, participation should not be initiated without a signal. Furthermore, a fixed-amount stop-loss must be used as a risk management measure. Without these two prerequisites, participation in this corrective wave is not recommended; one should prepare for the subsequent driving wave.
