China Bull Market Pattern: Slow Rise, Quick Fall

• Article
• 2024-08-24
• 18 Comments

Here is the translation of the provided text into English: "Are plans, principles, and strategies important?

My answer is that I don't have these things, and I never pay attention to them.

I just take a light position, set a stop loss, follow the price, and continue to add a light position when profitable.

That's all; if there must be a plan, I only have these simple actions.

In fact, they are not any methods or principles.

When you are trading with margin leverage, can you not take a light position?

Can you not set a stop loss?

So, I don't have any principles or strategies.

In short, profit has nothing to do with you.

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Don't boast or be dizzy with yourself; it's just a gift from the market.

It's not because you have the ability to make a profit.

If you have been working hard in the trading market or looking for a winning method, you should know from now on that it is of no help to your trading.

But if you are always losing, it is indeed related to you.

You are always in doubt, always expecting, always fearing, always analyzing, always planning, always setting rules for yourself to follow trading principles, but in fact, you are always losing.

The way of trading lies in the methodlessness.

Be outside the market, take a position in line with the trend, wake up to the urgency of enlightenment, and act well after making a profit.

Be free and easy, and the world will transform itself.

Know how to start and also how to stop, the market operates on its own, and I profit on my own, but I am outside the market.

As your understanding of the fundamentals deepens, you will find that there are many projects and methods in fundamental research.

Here are six simple steps for fundamental stock selection.

A stock with good fundamentals should have a clear main business, outstanding performance, growth potential, be an industry leader, be recognized by institutions, and have news confirmation.

1.

Clear Main Business: When you buy a stock, you first need to know the company behind the stock, what this company is doing.

But knowing what it does is far from enough; you also need to know if the company's main business is clear.

A company with a messy main business is difficult to manage well and hard to form a brand advantage.

From the F10, we can see whether it has the characteristic of a clear main business.

2.

Outstanding Performance: As a listed company, performance is very important.

Only with good performance support, the stock has a certain risk resistance and investment value.

For example, Kweichow Moutai, which is well-known, has a gross margin of over 90%.

Such an enterprise will be in an upward channel for a long time, and even if it experiences stock market turbulence, it will not affect such an enterprise.

3.

Growth Potential: Companies whose earnings per share are increasing every year are the first choice.

Everyone should not only look at the year-on-year growth rate of earnings per share but also look at the growth of the main business.

The growth rate of main business revenue and the growth rate of earnings per share are basically synchronized.

By comparing these two, you can determine that a company has growth potential.

4.

Industry Leader: Looking at the ranking of earnings per share in the industry, the company in the first place is undoubtedly the industry leader.

It is best to compare listed companies by putting similar listed companies together, so that they are comparable.

If they are not similar listed companies, it is difficult to compare.

5.

Institutional Recognition: Regarding institutional recognition, you can first look at the top ten shareholders to analyze the institutional holding situation.

If the proportion of institutional holdings is relatively high, you can also see the emergence of some new institutions, and you can also see the presence of some influential institutions.

If you choose this stock, you are on the same side as the institutions.

If institutions want to make money, they must pull up the stock price, and you are not following the sedan chair?

(Note: Stocks with many institutions do not necessarily rise sharply.

Think about it, with various fund main forces staying inside, who is willing to raise the price to let others make money?

Stocks with many institutions are mostly slow bull stocks.)

6.

News Confirmation: When deciding to buy a company's stock, in addition to the necessary analysis from the financial statements, you can also collect information through the news, that is, through the media and the Internet, or by reading institutional research reports, to confirm our analysis of the statements.

The law of the Chinese bull market: slow rise and sharp fall.

This is because in a bull market, many people do not think it is a bull market.

The so-called bull market needs to rise a lot, such as the market doubling, setting a historical high, and a large number of stocks rising five to ten times, and then everyone recognizes it as a bull market.

In the process of forming a bull market itself, everyone is skeptical.

But the trend of the bull market has been formed invisibly, with a continuous influx of incremental funds entering the market every day, pushing the stock market to rise.

Even if there is a pull-up and dive in the morning, and a bear market in the afternoon, there will be funds entering in the last half hour, thus forming a result that rises no matter how it fluctuates.

This is also an order dominated by bulls after a day of multi-bull and bear game.

This will inevitably lead to the daily increase not being too large, after all, there are differences between bulls and bears every day, even if there is a bearish news, the market can quickly digest the bearish news, and even interpret the bearish news as bullish news, then under the game of so many factors, it will form a situation where it rises every day, but the increase is more or less, sometimes a big rise in one day, and then a small rise for a few days.

This process will form a lot of profit-taking positions, and many investors actually do not have a firm bull market thinking, just thinking about speculation, when to see the top and run, so when the stock market suddenly falls one day and does not pull up, it will induce a large number of speculators and bull market skeptics to sell stocks together, resulting in a sharp decline trend.

And the trend of the bull market is not formed in one day, it is formed after several years of continuous decline, the bottom has been a long-term horizontal, grinding bottom, and then formed an upward trend, the most obvious feature is that the weekly K-line and monthly K-line are in an upward channel, this trend will form a solid support for the stock market, once it falls to an important support position, there will be a large number of buy orders to enter, whether it is new stock investors or short-term funds that fled during the sharp decline, they will buy again.

This makes the bull market quickly stabilize after a sharp decline, and then return to the previous pattern of skepticism, game, and capital-driven, rising and shaking again, and surpassing the previous high, and setting a new high again, until the next time there is a chip loosening, and there is a sharp decline again, repeatedly circulating.

This is also why many stock investors still cannot make money in a bull market, because they do not have a bull market thinking, they dare not buy in the process of slow and slow rise, and they just enter when the rise accelerates, and then they encounter a sharp decline, and after the sharp decline, they are afraid to see the top and be stuck at the top, so they rush to cut meat.

Just cut the meat, and the stock market stabilizes and shakes to set a new high.

Repeated cycles, the result is that the bull market is getting higher and higher, the market has a large rise space, and many stock investors are still repeatedly chasing high and cutting meat, and finally the bull market enters the frenzy stage and finally sees the top, and all the stock investors who have not made money in the bull market are trapped, and at this time these stock investors are not reconciled, because they believe it is a bull market at this time, so they wait and wait, and wait for four or five years of bear market decline.

Therefore, the bull market will have the characteristics of slow rise and sharp fall.

In this process, only the firm believers in the bull market can firmly hold their own high-quality chips.

Calm heart, fixed method, according to the law, naturally, the operation is unobstructed, to be a quiet investor fixed method, simply speaking, you have learned a lot of ways, try to integrate it into a simple, and in line with your operating cycle formula.

Including, how to cut in?

How to hold still?

Stop loss point?

Profit point?

Calm heart, simply speaking, is only to pay attention to whether their own stocks have buying and selling points, and then, according to the law to execute, ignore others.

The most important thing for traders is the ability to respond during the game, not the prediction of the market.

Good stocks, there are every day, to select strong individual stocks, is also very simple.

However, the stock investors who can really make a profit are not many.

Because the vast majority of people are reluctant to sell at a high position when the stock rises strongly, simply thinking that the stock can still rise, and take it for a while, until the stock falls back at a high position, they realize that they want to sell, resulting in the loss of profits.

So the question is, how to buy and sell strong stocks to obtain the maximum profit?

Buying and selling stocks, this is to rely on technical data to assist, such as moving averages, technical indicators, and intraday chart trends.

Among them, the intraday chart can be said to be the most real data, because it reflects the actual transaction data changes of the day, if you can fully understand, the stock selling point we can see at a glance.

Intraday trading captures the opportunity to enter the market and immediately get rid of the entry cost after entering the market.

If you cannot make a profit immediately after entering the market, you should be ready to leave quickly.

Because this trading method is short in the market, the risk of market fluctuations is relatively low."

Please note that some terms might not have direct translations or might be industry-specific, so they have been translated in a way that best conveys the meaning in English.