Let's discuss the understanding of the environment, market trends, primary upward movements, and pullbacks. This includes analyzing the overall market conditions, identifying key support and resistance levels, recognizing pattern formations, and understanding the psychological factors influencing price actions. By doing so, traders can better anticipate potential reversals or continuations and make more informed decisions in their trading strategies.

A basic principle is that if you want to make money, you need to operate within an upward trend to have the greatest safety margin.
The term “safety margin” comes from value investing, referring to the gap between stock price and valuation.
Whether we’re doing thematic speculation or focusing on core stocks during a trend’s main upward wave, what is the safety margin? It’s the momentum!

Or rather, the environment!
Yes, I think the word “environment” is very appropriate!
Let’s take recent aerospace development as an example. We can clearly feel that on both sides, they are almost two extremes!

On the left side, the market is turbulent, with a clear upward trend, momentum, quantity, and strength all showing a powerful advantage—it’s a dominant force. But on the right side, it’s like a ghostly wail and wolf howls!

So why is it said that,
During an upward phase, be bold and daring; during a decline, be cautious and timid!

The momentum I mentioned actually has two meanings. I wonder if everyone can grasp them.

The first is the overall atmosphere, quantity, strength, and momentum of the entire sector or market, showing a crushing advantage for the bulls. When this happens, don’t wait—don’t hesitate—choosing stocks is more important than technical analysis, holding stocks is more important than switching!

Hold the leading stocks from the beginning to the end!

The second is the individual stock’s own trend—whether it’s an upward or downward trend. In fact, just zoom out on the chart, and you’ll see at a glance whether it’s up or down!

Many people like to buy the dip, but actually, what they call buying the dip is just catching falling knives after the main upward wave has ended! They say, “I understand the pattern,” but in reality, they have the heart of a thief and the courage of a thief—yet the thief is gone!

So what does it feel like to truly participate in the main upward movement?

Real buying the dip looks like chasing high or even hitting the limit-up!

I believe that,

During an upward phase, the operation should be:

Buy more as it rises, don’t sell on pullbacks!

During a downward phase, the operation should be:

Sell more as it falls, don’t buy on rebounds!

Breakouts during an uptrend should be bought, and breakdowns during a downtrend should be shorted—that probably nobody will oppose!

When I say “don’t sell on pullbacks,” I mean if you judge that the market hasn’t ended, and the leading stocks you hold need to withstand divergence and volatility.

Of course, if you’re doing intraday ultra-short trading, maybe we’re not talking about the same thing—please don’t complain! Thank you!

Additionally, don’t buy on rebounds! Rebounds are a continuation of the decline—every bounce during a downtrend, one, two, three, from a big-picture view, is a trap with more meat than bones!

Some people might have made money on rebounds these past couple of days, but my experience is that I often get caught holding the bag on the second day of a rebound!

Anyway, you need to set a character for the market and for individual stocks—are they in an upward trend or a downward trend?

In an environment of an upward trend, stocks in an upward trend are generally easier to profit from!

In a downward trend environment, stocks in a downward trend are generally much harder to profit from than climbing to the sky!

Don’t believe it? Go verify and see if that’s true!

The same old advice: focus on the big picture first!

Tactical diligence cannot compensate for strategic neglect!

I can’t help but repeat my catchphrase:

Trend, has a veto power!

Stocks in an upward trend are not to be traded in a downward trend.

Stocks with a main upward movement should not be traded based on rebound patterns.