Who is really making money?

Data Overview: [Taogu Ba]

Real Trading Data: Since March, average loss per person is 4%. (Not including the 36% who withdrew due to excessive losses; the actual situation is even worse.)

Trader Market Ratings: Since January 23, over 39 trading days (plus today’s 3.3 points), only 4 days scored above 5 points. (Most traders are short-term, so it’s clear how difficult short-term trading has been in the past two months.)

Market Sentiment: Four consecutive trading days below 50.

Consecutive Limit Data: Very bad.

Consecutive Limit Relay Data: The red box (bottom left) indicates profitable zones; the yellow circle is average; the blue circle shows difficult areas (current situation). Currently, it’s good for 2 days, but expected to be 3-5 days. This data shows recent consecutive limit relays are tough, often opening high and closing low. Longer green bars mean more difficult days.

Yesterday’s Breakouts: Green indicates low failure rate for consecutive limits; breakouts the next day tend to suffer big losses. Yellow indicates higher failure rate; even if breakout fails, the next day may see a rebound or small loss.

Top 10 Trades Yesterday: Large-volume stocks; blue indicates easier profit from big trades; green indicates difficulty.

Hot Stocks: Same as above.

Recent Multi-Board Stocks: Blue indicates stocks that tend to rebound after hitting the limit; green shows stocks that rebound after breaking the limit for several days, but with some days of decline.

Many other indicators suggest recent market conditions are tough, with low tolerance for mistakes and no sustained profit effects. Daily rotations are driven by quant strategies, and catching one rotation can lead to significant losses. Recently, full positions chasing every rise and fall have resulted in normal losses of 20-30%. Some extreme cases have been halved or worse (within 10 days of the trading contest, the maximum loss shown is -70%, with some at -60%, -40%, and many at -20-30%).

Why mention this?

1. When the market is poor, especially with no sector showing sustained strength and daily rotations driven by quant strategies, it’s best to reduce trading, cut positions, and protect capital.
2. Learn to interpret market indicators. Whether you’re trend-following or trading limits, these indicators are essential. When most indicators are above the 5-day moving average and mostly red candles, it’s time to go all-in. When most are below the 5-day moving average with more green candles, reduce positions or consider holding cash. Avoid chasing every rise and fall; consider going completely flat.
3. Past experience or buy points are not invalid. Everything is cyclical; different cycles suit different strategies or buy points. For example, from November to mid-January, chasing the market was profitable. Now, that approach is no longer effective. The methods and buy points haven’t failed; the current market environment just doesn’t fit them.
4. After each big profit phase, a sharp loss phase usually follows. Review past data during profitable periods: whenever there was a rapid 45° acceleration in the market, a significant loss phase typically ensued afterward. All things in the universe are relative—highs and lows, abundance and scarcity, hot and cold, big and small.

Timing Trading: Currently in a rotation phase (next phase will be a strong upward trend, not yet reached).

Index: Three consecutive dips suggest a bottoming reversal in technical patterns. Today’s strength seems driven by Hong Kong stocks rather than intrinsic strength of A-shares. Hopefully, Hong Kong stocks will remain strong in the coming days; otherwise, I fear a breakdown of this support level. The next support is near the yellow arrow (around 4002). Today’s resonance was with chips (storage).

Most sectors lack sustainability. A sector tends to be strong for a few days then fade. It’s best to stay light on positions and wait. During this period, avoid frequent intraday chasing, reduce trading frequency, cut positions, and avoid chasing every rise. Minimize holding overnight or consecutive stocks, especially those with low volume and high volatility.

Market conditions are tough; reviewing more won’t help much. Predictions or plans can’t keep up with quant rotations. To avoid misleading, I plan to write 1-2 main posts per week (preferably every Friday). When conditions improve and become more sustainable, I’ll resume daily updates.

By the way, today the index hit a bottom, with Friday’s sentiment at a low point. This morning, sentiment remained low, but rebounded in the afternoon. Tomorrow or the day after, sentiment may rebound again. Today’s afternoon V-shape rally was driven by Hong Kong stocks, so it’s important to consider Hong Kong’s performance. If Hong Kong continues to rebound, A-shares likely will too; if not, watch for potential downside follow-through. I’m still holding energy and computing power stocks; I sold my Golden Bull position on Friday afternoon, so now I only have computing power, energy, and energy storage.

I’ve looked around but found no clear clues. I can only wait for a rebound. Tomorrow, I plan to stay flat or watch intraday.

Everyone, hang in there for now. Play lightly, protect your capital, and wait for opportunities.