The big pancake breaks 80,000, how to avoid pitfalls on the road to a bull market
1. Clarify investment goals and risk tolerance
1. Set profit-taking and stop-loss targets: In a bull market, set clear profit-taking targets and stop-loss limits to guard against sudden market reversals. When in profit, gradually reduce positions to lock in some profits and avoid over-pursuing maximum returns.
2. Maintain moderate risk control: No matter how prosperous the bull market is, keep a certain amount of cash to cope with potential market pullbacks. At the same time, manage positions well to ensure that the risk level of the investment portfolio remains within a controllable range.
2. Rational investment, avoid blindly following trends
1. Invest based on fundamentals: Choose investment targets supported by good performance and reasonable valuations. Avoid blindly chasing high-priced popular stocks or cryptocurrencies due to heightened market sentiment.
2. Calmly face market sentiment: The market sentiment is extremely optimistic during a bull market, but it is important to maintain independent judgment and avoid blindly following others to buy in. Keep a clear understanding of the investment targets, especially to avoid following the crowd just because others are making money.
3. Flexibly respond to market changes
1. Build positions in batches and increase holdings: Consider using a “reverse pyramid” strategy for adding positions, where you start with a small buy to test the waters and gradually increase holdings as the trend becomes clearer. This allows you to seize opportunities while reducing risk.
2. Sell at the right time: As the bull market approaches its end, gradually reduce holdings instead of waiting for the market to start declining before hurriedly selling. Selling in phases can ensure some profits are locked in, reducing psychological pressure and uncertainty caused by market volatility.
4. Pay attention to policies and market signals
1. Pay more attention to financial news: Policy changes will directly affect market trends. Therefore, investors should keep an eye on financial news and incorporate policy trends into their observations. Following policies and “going with the flow” is the right approach.
2. Pay attention to market signals: Before the end of a bull market, there are often signs such as excessive optimistic sentiment and abnormal increases in trading volume. Investors should always pay attention to these signals, as well as changes in the macroeconomic environment, to judge whether the bull market is entering its final stage.
