Stock Advice (2026.4.6)

[TaoGuba]
After the holidays, the difficulty of operating in the stock market is pushed to the max—honestly, I advise retail investors to stay rational, control position sizes, and wait for the right moment

Objectively speaking, after the Spring Festival holiday ends, the difficulty of trading in the A-share market rises directly to a level comparable to hell—this is the reality that the vast majority of investors participating in the market can genuinely feel. There’s no rhyme or reason to the market’s price action. Hot themes rotate so quickly that it leaves people overwhelmed. The day before, a sector might still look strong, but the next day it could gap down and then slide lower across the board, with the collapse so complete that the ability to make money almost disappears. Whether you’re an experienced veteran or a retail investor who just entered the market, it’s very hard to make money in such conditions. Instead, even a small mistake can easily pull you into a swamp of losses.

Just a few days ago, Beijing Business Today even published an article specifically mentioning that quantitative trading is gradually phasing out the traditional methods used by old-school traders. This view also accurately hits the ecological changes taking place in the current market. You have to know that old-school traders have long been an important force in short-term trading in the A-share market. In the past, by grasping emotion cycles and hot-sector themes, they could always find profitable opportunities. But now, under the impact of quantitative trading, the once-mature operational logic of old-school traders has been completely disrupted. The high-frequency trading and algorithmic orders from quant funds have completely compressed the operational space available to old-school traders. Judging by the market’s actual performance today, most old-school traders are in a loss position. Even the old-school group that used to dominate short-term trading is now struggling to move forward in the market.

Perhaps some people think that losses among old-school traders have little to do with retail investors. In fact, if even old-school traders are in this situation, ordinary small retail traders will only be in an even tougher position. Retail investors already have shortcomings such as information lag, small capital size, and insufficient professional analytical ability. In a chaotic market dominated by quantitative trading, they can’t keep up with the momentum of the funds and can’t withstand the market’s violent fluctuations either. They can easily fall into a vicious cycle of chasing rallies and cutting losses, and the loss magnitude will be even larger than that of old-school traders. Many people inevitably ask: will this quant-dominated situation, with extremely difficult execution, continue forever? The answer is obviously no. Quant trading only temporarily occupies the market’s leading role. To put it plainly: “When there’s no tiger in the mountains, the monkey becomes the king.” Once major players outside the market—like funds—enter in large scale to lay out positions, the influence of quant funds will drop dramatically, and it will be impossible to stop a truly trend-driven行情 from arriving.

And it is precisely based on this judgment that I sincerely advise all retail investor friends here: if you have been losing consecutively in this round of trading, and your account drawdown has already exceeded 30%, under no circumstances should you keep clinging to luck and forcing your position. Don’t think about adding to your position to get back to breakeven either. The most rational approach is to temporarily go to cash and exit the stock market, and to stop all trading activity. Going to cash isn’t giving up on investing—it’s cutting losses in time to avoid getting stuck in a spiral of “the more you lose, the more you lose,” from which you can’t extricate yourself. During the cash period, everyone doesn’t have to completely detach from the market. You can watch my updates every day. I will keep tracking market developments, analyzing changes in the行情, and help everyone grasp the timing. When I can truly “swim with ease” in the market and when a real major trend行情 arrives, it won’t be too late for everyone to come in and compete. In this current phase, entering the market is no different from voluntarily handing out money, and there’s simply no need to do it.

Looking at the recent market performance, although we’ve already entered April, the Qingming Festival hasn’t fully passed yet, and market sentiment remains sluggish. The atmosphere of funds standing by is thick. In the past few days, the stock markets in Hong Kong have rallied sharply, but A-shares have still been unable to follow with strength. Throughout the day, trading volume has not shown any obvious expansion. The core driver of a rising stock market is the amount of capital. Without volume to support it, price increases are like water without a source and trees without roots—there is no way to form a sustained rally.

From the perspective of technical trend, the current market is clearly in a downtrend. Technical investors generally are waiting for the final “last drop” of the 5th wave to complete. In other words, there is still the risk of stage-by-stage adjustment that hasn’t been fully released yet. Based on this kind of technical judgment, the operating strategy going forward remains the same: when you see rallies into resistance, reduce positions and exit the market, keeping your position size at an extremely low level. In addition, quantitative trading has thoroughly changed the rules of the market’s emotion cycle. In the past, A-share short-term emotion cycles roughly needed about half a month to complete one full rotation—from the start, to fermentation, to the climax, and then to the fade-out—there was enough time for reaction. But now, with the high-frequency operations of quant funds, the emotion cycle is compressed directly to around three days. The cycle gets shorter, volatility intensifies, and it basically doesn’t give investors a chance to react or correct mistakes. This is also an important reason why short-term trading has become increasingly difficult.

My own recent trading has also always put risk control at the core. Meinuohua, as a relatively resilient underlying, was ultimately also cashed out by funds. This shows that market sentiment is depressed. Besides that, I have already fully liquidated and exited all my other held stocks. The core is to push the overall position to the lowest level, keep the account’s risk within a very small range, and never take unnecessary risks.

Looking at the performance of hot stocks in recent months, it has left many investors who are keen on short-term “board-chasing” absolutely worn out. If you open the Tonghuashun software, you can see that the hot stock index has continued to trend down over the past three months, which is completely the opposite of the old logic that hot stocks “must rise the next day.” In the past, when the market行情 was good, hot stocks—thanks to high fund attention and strong popularity—most likely would extend the rally the following day. But now that the行情 has reversed, hot stocks have instead become the worst-hit area where funds flee. The next day they often gap down and then fall sharply with significant pullbacks. If you’ve been stubborn about doing short-term trades on hot stocks, during this period you basically can’t avoid losses. This once again shows that the current market environment is no longer suitable for continuing to use the old hot-stock trading playbook.

In short, the A-share market is still in an adjustment cycle. The difficulty of trading is extremely high, and the risk is far greater than the opportunities. Ordinary retail investors must recognize reality: keep your hands in check, control your position, and don’t trade blindly. Wait patiently for market changes after the Qingming Festival, wait for the end of the 5th wave decline, wait for trading volume to gradually expand, and wait for the major trend行情 to truly arrive. Before that, either go completely to cash and observe, or at most take out only 10–20% as a small position for light trial-and-error. Under no circumstances should you engage in a heavy-position bet. Protect your principal—that is the most important thing right now. Just wait for the market turning point to appear, and then capture the real profitable opportunities.