[Red Envelope] This week's reflection: China Power and Henan Energy cycle — March review and key insights!

The trading days of March are about to pass, and every year, March and April are some of the more difficult months for short-term trading. Many traders encounter significant drawdowns each year, complaining about changes in the market’s ecological environment; there are all sorts of opinions. However, even though trading is more challenging, there will still be deterministic trades within the patterns; it’s just that the frequency decreases. In other months, there might be four or five opportunities in a month, while in the months with higher trading difficulty, there might only be one or two. This places a high demand on trading aesthetics and rhythm, requiring patience against desires and overcoming human greed, anger, and ignorance, which is quite painful. Looking back, you’ll find that most people fall on the path of charging forward, while only two or three stand on the podium. [淘股吧]

Everyone has a different trading style and understanding of emotions, which leads to different levels of certainty for each trader. For instance, those who focus on the first boards differ from trend traders and those who engage in continuous board relays; their anchors and trading certainties will definitely vary. However, most people’s trading has not reached this level; most still flail around like headless flies, feeling a mix of fear for their friends’ struggles and envy for their friends who drive Land Rovers. When others make money and they do not, their mindset changes, leading to anxiety; conversely, if everyone else loses money and they manage to earn a bit, they feel quite accomplished. They throw their trading discipline and framework aside, often falling into a gambler’s mentality of thinking they are the only sober one among the intoxicated.

For me personally, there were a few deterministic trades in March, which I will summarize below.

1. YN Energy Holding:

February 26 was the first point of certainty for buying. The market’s board height was compressed to five boards. The previous five-board stock, Reading Technology, had a poor opening feedback the next day, continuously hitting two lower limits. Therefore, whether YN could break through was particularly important. It opened with a strong upward push, indicating strong buying interest, so I followed in, buying on the unexpected, which was at the breakthrough of the consecutive boards.

March 6 marked the second point of certainty for buying. YN Energy Holding was in a high-stage consolidation. Normally, if it did not break the previous high on March 3 within two to three days, it might enter a corrective process. Starting from March 3, funds were consistently supporting it without signs of correction. On March 6, it opened green during the auction. If it opened downward, it might have faced a correction, but after opening, it quickly surged above the moving average without breaking it, showing strong support. So, I followed the funds with expectations of breaking the previous high, and that day ended with a limit-up.

The last point of certainty for buying was during the regulatory period, focusing on the double-top before the high. I have discussed this type of buying point many times before, similar to the regulatory period buying points of Saiwei Electronics and Xian Dao Intelligent. It typically appears around the fifth day of regulation, and there must be a clear stop-loss signal. If the decline is significant, one can preemptively speculate. On March 17, the first stop-loss doji appeared, and the following two days of bullish candles established a temporary bottom. Actually, buying on the 19th or 20th would work well; those who are cautious can reduce their holdings near the previous high or wait until a weakening signal appears to exit, maintaining proactive control.

2. GCL-Poly Energy:

This is a stock that resists declines and has continuously exceeded expectations for buying points. At that time, the market was in a rotation chaos phase, with poor profit effects not focusing. On March 11, the reversal failed, yet the next day it opened high, greatly exceeding expectations. After a sharp drop at the open, I managed to enter at the intraday moving average, successfully realizing a limit-up, and the next day the market environment was at a freezing point, still providing opportunities for high gains.

3. Huadian Liaoning Energy: March 23 was a weak-to-strong buying point on the sixth board. The next day, it actively broke through with unusual movement on the seventh board; both intraday and upper board were buying points, and after the eighth board, it could only be a matter of adding positions aggressively.

On March 24, there was an active breakthrough with unusual movement. It opened slightly lower; if it directly dropped, it would indicate weak buying interest. However, if it surged right at the open, then intraday retracements, including the upper board, would all be active breakthrough buying points. After the breakthrough, the next day continued to accelerate the market height. I will give a recent contrary example: everyone can understand this by comparing the intraday charts. On February 10, Hengdian Film, an active breakthrough with unusual movement, was strong. The next day it opened flat, and after the opening, there was no fund maintenance, directly dropping to the lower limit, which was below expectations. In contrast, Huadian Liaoning, after the breakthrough with unusual movements, continued to rise at the next day’s opening, which was an exceeding expectations buying point.

The trading difficulty in March was hellish, but if you only engage in these deterministic trades, earning thirty to forty points is not a problem. For the majority of us, including myself, often we can’t control ourselves and dabble in miscellaneous trades. In the end, it would be better to have only done these three deterministic trades in a month—quick and stable. Many people wish they could make three trades a day, so I say that short-term trading is not necessarily difficult; the difficulty lies in overcoming one’s greed, anger, and ignorance, suppressing the darker side of human nature, fearing to miss every opportunity to make money. The waiting process is quite torturous. What is not difficult is only doing trades that you understand, allowing the outside world to be tumultuous while maintaining your own peaceful space. I once saw someone online with a small amount of capital, just using idle money for investment, who only made ten trades in a year with a 100% success rate, tripling his capital. Honestly, I didn’t believe it until I saw it; I definitely can’t achieve that, but I will always believe that there are people beyond people and skies beyond skies.

Next week’s expectations:

In the coming month, the index may oscillate around the bottom range, which is not very friendly for those trading large-cap stocks. The market preference is shifting towards small-cap stocks or consolidating group dynamics. The market begins to enter the phase of Huadian Liaoning’s consecutive boards for catching up. Personally, I do not consider participating, as catch-up trades have randomness, typically ending after one wave. Once the wrong choice is made, it is normal to lose twenty or thirty points. On Friday’s closing, YN Energy made a board move, breaking away from regulatory expectations, and there is still room before the 200% unusual movement on the 30th. Regardless of whether there is a follow-up over the weekend, next week may see large funds continuing to engage, making it a battlefield for trading.

Best wishes!