Guys, there’s a kind of loss that really hurts.
You’ve made a decent profit, but then you slowly give it all back. I used to make this mistake all the time when trading in overbought markets. Prices kept rising and my account kept turning greener, so it was easy to fall for the illusion that as long as prices were still going up, the trend was fine. Later, I realized that at market highs, price isn’t the only thing worth watching. For example, after a rally, trading volume suddenly surges, but the price barely moves higher. The candlesticks look lively, surging and plunging; a breakout quickly reverses, and a drop is immediately bought back up. In situations like this, I usually stop interpreting it as simple strength. When volume is rising but the price can’t push higher, it means disagreement in the market is clearly increasing. Some people are still chasing the rally, while others are starting to take profits. You need to keep watching to see which side comes out on top.
There’s another situation that’s even more deceptive. The price keeps setting new highs, and the mood in the group gets more and more excited, but the pace of the rally is clearly slowing. What used to take one candlestick to achieve now takes several attempts just to break through. That’s when it’s easiest to say, “I’ll sell after it goes up a little more.” Often, that little bit never comes. So these days, when I see a market at a high, I don’t try to guess whether it’s the top. Instead, I look at whether it can keep rising with the same strength. If price, volume, and market structure don’t line up, I’d rather take some profits off the table first.
No one can calculate the exact top in advance. But when the market starts to turn, it usually leaves clues. A good trader may not be able to sell at the very top, but knows when to rein in their greed. @程总趋势论
You’ve made a decent profit, but then you slowly give it all back. I used to make this mistake all the time when trading in overbought markets. Prices kept rising and my account kept turning greener, so it was easy to fall for the illusion that as long as prices were still going up, the trend was fine. Later, I realized that at market highs, price isn’t the only thing worth watching. For example, after a rally, trading volume suddenly surges, but the price barely moves higher. The candlesticks look lively, surging and plunging; a breakout quickly reverses, and a drop is immediately bought back up. In situations like this, I usually stop interpreting it as simple strength. When volume is rising but the price can’t push higher, it means disagreement in the market is clearly increasing. Some people are still chasing the rally, while others are starting to take profits. You need to keep watching to see which side comes out on top.
There’s another situation that’s even more deceptive. The price keeps setting new highs, and the mood in the group gets more and more excited, but the pace of the rally is clearly slowing. What used to take one candlestick to achieve now takes several attempts just to break through. That’s when it’s easiest to say, “I’ll sell after it goes up a little more.” Often, that little bit never comes. So these days, when I see a market at a high, I don’t try to guess whether it’s the top. Instead, I look at whether it can keep rising with the same strength. If price, volume, and market structure don’t line up, I’d rather take some profits off the table first.
No one can calculate the exact top in advance. But when the market starts to turn, it usually leaves clues. A good trader may not be able to sell at the very top, but knows when to rein in their greed. @程总趋势论