“Bottom Fishing” Trap: Be Careful Not to Get Caught
“Bottom fishing” sounds quite tempting, especially when the market is in chaos. But many traders end up making big mistakes here and suffer heavy losses.
Let’s talk about the “Sell-off Wave”
The “Sell-off Wave” refers to a sudden spike in prices after a market crash. This is often the result of panic selling and buyers looking for bargains working together. However, this spike may be a false rebound, and prices may continue to fall afterward.
Why do people fall into the trap?
Fear of Missing Out (FOMO): Traders get nervous and fear missing a good rebound opportunity, leading them to buy at high prices, only for prices to plummet afterward, leaving them feeling despondent. Misreading the rebound: When prices rise in the short term, traders may assume the market is recovering, only for prices to fall again, leaving their assets trapped. Emotional trading: When prices rise, a glimmer of hope ignites in their hearts, leading to impulsive decisions made without logic, relying solely on feelings, which can be disastrous.
How to avoid the trap?
Stay calm: Don’t rush into action as soon as you see prices rise; wait until the market stabilizes and the trend is clear. Look at the bigger picture: Pay more attention to news, trends, and fundamental analysis; don’t let short-term fluctuations lead you astray. Stick to your plan: Make sure your buying and selling points are clear, and your strategy is firm; don’t let the market deceive you. Smart bottom fishing: Confirm that the market is genuinely rebounding before entering.
The key point is
A short-term rise does not mean a real rebound. Don’t let emotions control your trading. Follow your strategy; don’t just follow the crowd.
Finally, this is not investment advice; do your own research before trading.
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