What should we do at the beginning of a bull market? Every drop is for a better rise. How to judge the beginning and end of a bull market?
The significant characteristic of a bull market is that there will be at least two to three major adjustments during the entire process. After each adjustment, the market continues to soar; unless it is the last drop, the previous declines are all for better rises, each one higher than the last. When the final adjustment occurs, that's when the bull market ends with a sharp drop.
So, how can we accurately determine which drop is for a better rise and which rise is in the final "crazy" phase?
—— In terms of various sectors, there is rotation among different segments, market sentiment surges, opportunities increase, and the assets in hand begin to multiply in value.
—— From the emotional aspect, this is an important criterion for judgment. This stage is what is referred to as the beginning of a bull market, where opportunities are the most abundant and capital accumulation is the fastest. During this time, don't fear declines; try to discover as many opportunities as possible. You must find ways to preserve your principal and select those with the best return-to-risk ratios from the numerous opportunities. Place hefty bets, and then at the highest emotional peak of the bull market, gradually sell off the assets you accumulated at the beginning.
After such a cycle, your wealth can achieve a qualitative leap.
As for how to judge the last adjustment or the potential major drop into a bear phase:
Remember one thing: the judgment of the market at any time comes from: emotional theory + specific market conditions.
Looking at the market conditions, the normal progression of a bull market should be "increased volume and rising prices," meaning that the trading volume of the upcoming wave of rises should be greater than that of the previous wave of rises before the adjustment.
If any wave of rise shows a clear divergence, meaning that the trading volume of the new wave of rises does not reach a new high, or is even lower than the previous wave's trading volume, but the price points keep reaching new highs, that is a highly dangerous signal.
The point of change is likely already appearing.
In such a situation, if a change occurs, the consequences could be dire.
At this moment, it is crucial to have a clear understanding:
If you are still fixated on the account's previous highest market value, fantasizing about reaching the peak again, that is akin to being a gambler.
The final outcome is: stubbornly enduring the entire "crazy bear" phase, ending in tragedy.