Price fluctuations have their nuances. If you want to outsmart the traders, you must see through the hidden strategies!

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Below is my summary and further thoughts on these strategies to help systematically understand how to interpret market fluctuations and compete with the traders.

1. Rapid rise, slow fall (accumulating at low levels)

Interpretation: This pattern is often seen when traders accumulate stocks at low prices. A rapid rise attracts retail investors, but during a downturn, the pace is deliberately slowed, creating the illusion of a "market correction," luring them to sell. At this point, traders take the opportunity to accumulate more shares at a lower price.

Strategy: Don't rush to sell; observe the changes in trading volume during the decline. If the trading volume is low during the downturn, it may indicate fewer market participants, and traders are quietly accumulating. Be patient and wait for a reversal signal before considering entry.

2. Rapid fall, slow rise (distributing at high levels)

Interpretation: If the price falls rapidly while the rise is noticeably slow, it usually means traders are distributing stocks at high levels. A rapid decline signals traders are clearing out their positions, while a slow rise might lure retail investors into chasing the price up based on market sentiment.

Strategy: Observe the strength of market rebounds. If the rebound is weak and the trading volume is insufficient, stay alert and take profits or exit in time. Don't be deceived by the superficial slow rise; learn to identify the market's true direction.

3. Changes in trading volume at high levels (market vitality)

Interpretation: In a rising market, trading volume often increases with price rises, indicating heightened market activity. If the price reaches a high level while trading volume continues to increase, it suggests the market may still have vitality and warrants further attention. However, if price rises coincide with shrinking trading volume, it usually means the market is losing momentum and may enter a correction phase.

Strategy: If trading volume increases at high levels, you may hold your position moderately and continue to observe the subsequent market. But if trading volume continues to shrink at high levels, be cautious of a potential market reversal and lock in profits in time.

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