The most common way to incur losses in a volatile market is to keep guessing the bottom.

Many people have suffered losses in this round of pullback—entering the market at 104000 and getting trapped, adding positions at 100000 and continuing to drop, and trying to catch the bottom at 98000 only to see new lows. Some are even contemplating whether to go all in at 90000 or 80000, and the result is that the more they add, the deeper they get trapped.

But in reality, the real bottom never appears quietly.

Take the recent 98000 as an example. After two dips, it stabilized with increased volume, followed by a rebound to 107000, creating a space of nearly 7000 points in between. Looking further back to the 74000 instance, it also had a double bottom structure with significant volume, and it consolidated for a month before starting—this kind of consolidation process itself is a signal for the main force to accumulate positions.

Before each significant upward movement, there are usually these characteristics: first, testing the support strength to find the bottom, then confirming the willingness of capital to intervene with increased volume, and finally, the actual rally.

The so-called bottom fishing is not about accurately guessing the lowest point. The fish head is certainly tempting, but no one can hit the absolute bottom every time. Relying on luck to guess right once does not mean that a trading system has been established.

A more prudent approach is to wait for signals to appear: Has the double bottom pattern formed? Is there a significant increase in trading volume? Is the consolidation sufficient? Only after these conditions are met should you enter the market, as there will at least be technical support.

After confirming the bottom, opportunities still exist, and there is no need to rush to be the first to take the plunge. Especially in spot trading, it is responsible for your funds to remain on the sidelines until there is a clear signal. The market won't run away, but if you lose all your principal, there will really be no opportunity left.