5 Things You Must Pay Attention to During a Downtrend!
Keep a record of every major market pullback; there will always be a group of people who 'gain enlightenment' and another who 'end up in solitude'. When the market isn't performing as expected, it is a critical moment to test trading logic and mindset management. The following 5 things are recommended to keep in mind; they can truly save your life at crucial times👇
1⃣ Protecting your capital is the primary principle
When the market is bad, don't think about 'catching the bottom'. Survive first to have a chance to see the next spring. Control your position; don’t let one drop ruin your entire account.
2⃣ Emotion does not equal judgment
The 'fear index' is not a trading basis. Just because others are running away doesn't mean you should too; just because others are entering doesn’t mean you should chase. Stay clear-headed and make decisions you understand.
3⃣ Don’t easily add positions; don’t fool yourself into averaging down
A price drop doesn’t mean it’s 'cheaper'; it means the market is repricing. Adding positions blindly without doing homework can easily lead to deeper losses, ultimately making you a 'long-term investor'.
4⃣ Focus on structure, don’t chase volatility
Behind a big drop, there are often structural signals, such as a broken trend line or increased volume. It's hard to make money by just watching the K-line fluctuations; understanding the broader direction is key.
5⃣ Adjusting your mindset is more important than operations
The market won’t always rise or always fall. When it's time to learn, calm down and review; when the market is bad, practice the basics instead of rushing to 'counterattack'.
⚠️ Final suggestion: Don’t let a momentary loss define you. When the market is cold, it's a great opportunity to reflect and consolidate yourself. Remember: making money is a process; first, let yourself live a little longer to have the qualification to earn a little more.
