In the field of financial investment, buying high and selling low can be considered the 'number one killer' of investors. Countless people impulsively rush in after a strong bullish candle, only to face a sharp price drop; during a major bearish candle, they hastily short the market, resulting in a rapid reversal. Why do operations that seem to follow the trend always turn into a 'harvester' of funds? The key to breaking this dilemma lies in understanding the underlying operational rules of the market—80% of the time, the market is oscillating; recklessly buying high and selling low is like swimming naked in turbulent waters, where a slight misstep can lead to being engulfed.
To master the strategy of buying high and selling low, a rigorous analytical framework must be established: firstly, one must review the market's 'prelude', focusing on the multiple validations of key price levels. Before the market breaks out, has it gone through a solid bottoming process, an initial rise, and a confirmation pullback? It's like a carefully choreographed play; only after completing all the groundwork can the climax be anticipated. Even if these conditions are met, one must remain vigilant against the trap of false breakouts, as the market is always full of uncertainties.
Secondly, considering the spatial dimension is equally important. If there is strong resistance just above the upward space and critical support just below the downward space, then the risk-reward ratio of buying high and selling low will be severely unbalanced. Just like measuring the distance to the target before shooting an arrow, blindly drawing the bow will only be futile. Investment decisions require balancing potential gains against risks; when the profit space is insufficient to cover stop-loss costs, entering the market recklessly is akin to 'picking up chestnuts from the fire'.
A truly mature investor views every trading opportunity as a carefully designed 'risk experiment'. A stop-loss is not a loss, but an 'option premium' paid for capturing opportunities. What we pursue is either a highly certain entry timing—decisively acting when market signals resonate strongly; or an enticing risk-reward ratio—using a small stop-loss to seek multiple returns. If both conditions are met, one should act decisively, as such opportunities are golden windows bought with stop-loss capital. Remember, investing is not a game of luck; every decision requires the support of rational analysis to steadily navigate through the tumultuous market waves.
