In a clear downtrend, the market's main melody is 'more declines and fewer increases,' and any rebound may be a trap to lure buyers.
Core principles and techniques: One must abandon the bullish mindset of 'increasing positions on floating profits in an uptrend.' Operations in a bear market resemble 'picking up chestnuts from the fire,' allowing only light participation in rebounds after short-term sharp declines. It is essential to adhere to right-side trading, which means waiting until there is a clear short-term signal of price stabilization and a rebound begins before lightly entering, almost never trying to catch the bottom. Once there is a profit, quickly take some profits off the table to reduce holding costs.
Risk control: The stop-loss range for a single trade should be set smaller (for example, 3%-5%), as declines are often rapid and severe. More importantly, absolutely do not attempt to average down costs during a decline by 'rolling positions,' as this is equivalent to increasing positions against the trend and is a shortcut to liquidation.
🔄 The secret to profit in a volatile market
When the market enters a box-like volatility with resistance above and support below, trend opportunities disappear, and the strategy needs to shift from 'holding' to 'trading'.
Core principles and techniques: half-position rolling is a strategy very suitable for volatile markets. Retain half of the base position to prevent complete miss out, and use the other half of the funds for high selling and low buying within the volatile range. The key lies in identifying the support and resistance levels of the volatile range. When the stock price stands above the moving average with increased volume, consider using the rolling position to intervene; when the stock price falls below the moving average with decreased volume, consider taking profits on the rolling position.
Risk control: in volatile markets, the profit target should be lowered; earning a price difference of 2%-3% each time can be regarded as successful. Avoid greedy fantasies of obtaining huge profits in a single instance. At the same time, once the price effectively breaks through the volatile range (whether upwards or downwards), the current rolling strategy should be stopped immediately, and the market condition should be reassessed.
💎 Summary and Action Framework
The essence of adjusting the rolling strategy is to respect market trends. When the trend is not present, decisively withdraw your sharpness.
First assess the situation, then act: before deciding to use any strategy, first determine what kind of environment the current market is in through daily and weekly charts.
Strictly adhere to discipline: in different markets, strictly executing the corresponding position and stop-loss discipline is fundamental for survival.
Be patient: in bear markets and volatile markets, high-probability opportunities do not appear frequently. Most of the time, you need to remain in cash or with a light position, patiently waiting for your 'batting zone'.
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