Brother Shrimp talks about why the gradual decline of the dog stock is the most lethal
Today it dropped 5%
Tomorrow it drops 3%
The day after tomorrow it drops again%
Such small continuous declines,
Are completely within the psychological tolerance of retail investors
Continuous decline is like a river embankment slowly leaking water,
It won't cause too much panic
Only a straight-line drop, like a river embankment breaking, will cause a chaotic escape
That will lead to panic selling at all costs
Small declines are like boiling a frog in warm water
It makes retail investors see their losses deepening little by little every day
Their pain will intensify day by day
At this time, they will become more anxious
This can raise the expectation value
Thinking it has dropped for so many days, it should rise now
They will be even more impatient to recover their losses
But being too anxious will lead to losing rationality
Gamblers are like this, until all retail investors are left with nothing
At this time, continuously raising the stock price
Let them recover a bit first
Let retail investors feel that they have survived the process of being washed by the big players
They will then recklessly increase their positions
Lower the average price
Then follow the big players to sip some hot soup
Wait for these people to go all in, borrowing to enter the market
Then comes a sharp drop, causing everyone to start cutting losses
Once everyone has cut their losses, then continuously raise the price, letting retail investors chase in again
Everyone feels this method is like a dog stock
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