Why does it always drop right after buying and rise right after selling?
Let's talk about something interesting that almost everyone has experienced: when trading, sometimes the price drops immediately after you buy it. After biting the bullet and cutting your losses, the price starts to rebound immediately.
If we talk about it, everyone probably has similar memories, as if the market operator is fixated on the few shares you hold, leading to a delusion that you can manipulate the market in reverse. However, when you actually try to act contrary to your instincts — selling when you want to buy and buying when you want to sell — you might still fall into a similar curse.
In reality, it’s not that the market operator is targeting anyone to cut losses; it’s just that someone always happens to get cut.
Every price point on the candlestick chart has trading records behind it; there will always be someone who happens to buy at the peak and someone who happens to sell at the bottom.
As mentioned earlier, people tend to have a particularly deep memory of their unfortunate experiences. If we were to statistically analyze this, out of a hundred trades, maybe only ten or eight times will they actually get caught, but those few instances leave a very deep impression, overshadowing other normal trading experiences.
This is also one of the greatest values of introducing quantitative thinking into the investment field. You can use historical data to analyze how, from the past to the present, if you consistently trade with the same logic, what is your actual probability (frequency) of getting trapped at the peak, rather than relying on your subjective impressions.
Of course, this system is not infallible; how the past was does not guarantee how the future will be. But at the very least, using statistical methods can help people break free from certain illusions, such as the fact that the market operator is not fixated on your little bit of money; it’s just that you have reinforced the memory of a few unfortunate experiences.
