Man Man You You wrote 5 articles, the content mainly includes the judgment indicators of the bull market and how to use these indicators for analysis.
In 2020-2021, many people made a lot of money, but since the bear market, many people have suffered severe drawdowns or even debts because they believed in the eternal bull market.
Today I will share with you how to escape the top. If you want to escape the top, you must understand the nature of this market. The nature of this market that I understand is where does the money come from? Only by understanding this problem can you change from a leek to a sickle.
To escape the top, you must understand what it means to escape the top. According to my understanding, the top and the bottom are ranges, not specific prices. Don't try to buy at the lowest point and sell at the highest point; therefore, the so-called escape the top means selling when it is close to the top.
So how to escape the top? There are two main ways to escape the top, one is active escape and passive escape; active escape indicators mainly include emotions; passive escape indicators are nothing more than liquidity, technical indicators, cycles, K-line acceleration and contract positions.
First, let’s talk about the active escape top indicator sentiment. This market itself cannot generate value. All value comes from the transfer of money. Therefore, if someone makes money, someone must lose money. According to the rise and fall cycle, if it has been rising for a period of time, the high point of sentiment is basically the peak of the market. Judging the sentiment of retail investors and escaping the top is the only way to sell at the highest point, but it is also possible to sell too fast.
There are many passive top-escape indicators. The advantage of passive top-escape is that we may get slightly higher profits, but passive top-escape indicators need to wait for the market's reaction, and have a slight lag compared with active top-escape indicators.
The first is liquidity. If market liquidity begins to decline and the main copycat products are frequently shipped, it is basically the top of the range.
The second is technical indicators, which still use shape trends, volume, price, and support levels to make judgments.
The third is K-line acceleration and contract positions. If the 4h K or daily K shows a negative rise, then it is likely to continue to rise at this time; if the K-line accelerates at the 5-minute/15-minute level, then it may be close to the top at this time. If the contract position also happens to be high at this time, then be careful.
Fourth is the cycle. If it rises too much, it will fall. If it falls too much, it will rise.
Regardless of whether it is an active top-escaping indicator or a passive top-escaping indicator, once we sell, don’t enter the market again with a heavy position just because the price has risen. For me, I usually operate like this: sell most of the stocks when the sentiment is high, and keep a small part to use passive indicators to escape the top.
Next time I will share with you methods of position management.