Let's take a look at the five stages of a bear market and the transition between bull and bear markets.
1. Sharp decline stage:
Everyone made a lot of money in the last round of bull market. This time it turned into a bear market, so it must fall sharply. So the first decline was very fierce.
2. Rapid rebound stage:
The first round of decline was too severe, and many people thought it was not a bear market. They still had the old idea that it would rebound after falling to the bottom. So after the first stage reached the bottom, many people who had previously escaped the top ran back to buy the bottom, which led to a rapid rebound. However, the high point of this rebound will definitely not exceed the high point of the previous round.
3. Oscillation and differentiation stage:
After the rebound in the second stage, some smart people thought that the bear market was coming and ran away quickly. Some people thought that the bull market was not over yet, so they continued to buy. At this time, some people were bullish and some were bearish.
4. Shrinking and negative decline stage:
After a long period of volatility, the market began to break the high point of the previous round, and then slowly fell or fell. At this time, basically no money can be made.
In this wave of decline, it is almost at the bottom of the bear market.
5. Hesitant rising stage:
At this time, the market began to rise slowly, but everyone was still a little hesitant and was not sure whether the bull market was really coming. So the rise was not fierce, but it was rising all the time.
This is actually the beginning of the bull-bear conversion, and the bull market has also risen. This is the first stage of the bull market, and no one believes that it will rise.
The market always goes against the thinking of most people, and the result is that it rises all the way. If it rises too much, it will reach the second stage of the bull market, and everyone thinks that it will fall back.
This is also the bottoming stage before the big bull comes, and the market valuation is low again at this time.
Generally, after the bottoming is finished, there will be a new low decline, which completes the bottoming stage. At this time, the market is volatile.
The most important thing at this time is that we have to survive. As long as we can survive, good days will definitely come.
The biggest problem at this stage is how to survive. To be honest, brothers with full warehouses can only bear it hard, and not cutting losses is the best way.
Brothers with funds, buy more when there is a big drop, and buy less when there is a small drop. This is a good way in the bottoming stage.