Three stages of bull market:
The first stage: bottom accumulation and shock upward
Main action: At this stage, main funds gradually intervene in the market, slowly raising the price, and at the same time creating shocks to cover the opening of positions. Through this operation, the main funds can accumulate a large amount of chips at a lower price, while the overall market is still in a wait-and-see state.
Market reaction: Market sentiment was generally depressed, with investors becoming cautious after experiencing early declines. Most investors are wary of market uncertainty and are hesitant to enter the market. However, some investors with a keen sense of smell began to notice the signs of the market's bottom and gradually scooped up funds at low prices.
The second stage: Breaking through the previous high and establishing the trend
Main action: At this stage, the main funds increase their efforts to push the price to break through the previous high, thereby establishing an upward trend on a technical level. At this time, trading volume increased significantly and market confidence gradually recovered. Market reaction: Traders on the right began to pay attention and enter the market. They relied on trend trading principles to decisively buy before the price broke through. However, most investors are still in a wait-and-see mode, and some even choose to go short against the trend because of fear of early declines. In the market, the trend is clear, with positive inflows of funds and sentiment pushing prices further upwards.
The third stage: comprehensive rise, market frenzy
Main action: At this stage, main funds have significantly increased prices, and market sentiment has reached its peak. A lot of good news comes out frequently, attracting more investors to enter the market. The main force gradually began to ship goods and lock in profits.
Market reaction: Market sentiment is extremely optimistic, and almost all investors are actively entering the market, chasing high returns. At this time, the market trading volume increased abnormally, and mainstream and copycat stocks generally rose. However, as the main funds gradually withdrew and the market top gradually formed, many ordinary investors failed to exit in time due to greed and blind optimism, and were eventually trapped in a high position.
