1. Once a trend is established, it won’t change easily.
Many people have been tortured by a major bear market and have developed a deep-seated bear market mentality, always thinking of cashing out at any gain. This is the most frightening.
Do not predict; learn to follow the trend. In a bull market, the greatest fear is having no position and watching others make money. Missing out can easily distort your mentality, leading you to recklessly jump in at the top and get trapped.
In the stock industry, if you don’t open for three years, when you do, you’ll feast for three years. If you don’t eat meat this year, how will you survive on porridge for the next few years? If you’re absent during the feast, you’ll be the one getting beaten; how can you talk about making money in investments?
2. Stay away from weak sectors.
In the great bull market of 2015, Citic Securities' stock price peaked on January 7, 2015, and has not reached a new high since. It’s worth noting that after January 7, 2015, many ChiNext stocks increased by four to five times. If you stubbornly held onto the brokerage stocks, how much did you miss out on?
I had a friend back then who saw the significant rise of brokerages in the fourth quarter of 2014. Hearing others say that brokerages would still perform well in a bull market, he finally jumped in in January 2015 and couldn’t move his position.
In the end, almost missed the entire bull market of 2015.
There are many similar lessons. The characteristic of a bull market is that the stronger the sector, the easier it is to rise; the strong get stronger.
When picking stocks in a bull market, it’s best to focus on the weekly chart and choose those that are at a three-year historical high. Such stocks often represent the direction of mainstream capital and are the explosion point of sentiment.
3. Add positions on breakouts.
In a volatile market, buying on a breakout can easily backfire because stock prices fluctuate; when they rise too much, they tend to fall. However, in a bull market, the success rate of buying on a breakout is high, and the efficiency of making money is also greater.
Be careful to set stop-losses; otherwise, if you buy wrong, you’ll be trapped.
In a bull market, there’s no fear of making wrong purchases; the real concern is holding on to a mistake and wasting time on the wrong targets while missing numerous opportunities.
4. Be sure to have a profit-taking plan.
In a bull market, even fools can make money, but only a few can safely take their money away. A round of revelry always requires someone to foot the bill.
Taking profits is also simple: find a moving average that is hard to break below; if it breaks, exit and re-enter at a new high.
For example, the ChiNext Index in 2015 rose very sharply. Using moving averages to take profits is most suitable for this kind of sharp upward trend; it's easy to find a moving average that is hard to break below, and once it breaks, exit unconditionally.
Be sure to remain calm and patient.
Do not be swept away by the market's euphoric atmosphere; refuse to follow the crowd blindly. Instead, continuously learn, conduct in-depth research, and stay updated on market dynamics, industry trends, and the fundamental conditions of companies to constantly enhance your investment capabilities.