[Red packet] When the market is this tough, how can linked players break the deadlock? (I)?

Question

From June 1 to today, over 29 trading days, with an average of 91 limit-up stocks per day. [Taoquba]

**With such explosive money-making effects, why is it getting harder and harder for retail investors to trade? **

In the market, more than a hundred stocks can hit limit-up at any moment. The semiconductor sector index is up 8%, and related ETFs can even seal limit-up. Then continuously, individual stocks trigger unusual moves, get brought into regulation, and even forced suspensions. In a market like this, who dares to say it’s bad?

But precisely in a market like this, some people kept doing “relay” trading in June—their account shrank by half. Others joined the trend and held still; come July, once the month turned, for three straight days, they wiped out all their profits—everything was fully gone. Swallowing exits by day traders, quant strategies taking over, institutions dominating—does retail still have a way out?

The market isn’t short of opportunities now, and even the money-making effect is very good, but the difficulty of execution is extremely high.

This is probably the most painful reality of China’s A-share market in 2026: abundant liquidity, a fragmented market trend—on one side, a growth feast where tech stocks keep making new highs; on the other side, the brutal reality of accounts continuing to shrink. Under extreme differentiation, most investors fall into the predicament of “in a bull market, in a bear account.”

Retail investors seem trapped in a vicious cycle of “buying when prices rise and selling when prices fall.” They always strike hard when a theme accelerates and peaks, then when the theme’s disagreement becomes severe, they cut and exit. Right after cutting, the market turns warm; once the theme starts to repair. It’s as if there’s someone watching you—if you chase, they sell; if you cut, they pump.

But now, the market’s ecosystem has quietly changed. Only by understanding what has changed—and knowing the reasons behind the changes—can we respond. Below, I’ll break down the logic for you.

I. Day traders quietly exit the frontline

Many people were lured in by stories of day traders turning 10,000x in a few years. After coming in, they immediately learn the relay-and-board-hitting playbook—“the brutal aesthetics” of the day-trader era.

What are day traders? Simply put, they’re the short-term capital in the market with the sharpest senses—most responsive, most daring to rush in.

In the earlier day-trader era, this style was naturally top-tier. It could let a person make assets explode in the shortest time and complete a class leap.

Day traders light the fire, build momentum, and forge a leader, driving the whole sector. Retail investors follow the emotion cycle; when the leader prints height, the chase-up and follow-through kicks in, and the money-making effect spreads layer by layer.

The emotion cycle—startup, main rally, withdrawal, and chaos—nurtured an entire generation of short-term traders. Back then, trading had clear rhythm: test in the startup phase, heavy positions in the main rally phase, stay in cash in the withdrawal phase, wait for direction in the chaos phase.

Everything was step-by-step, with rules to follow.

But now, some people haven’t realized that the market has already undergone drastic changes. Those guiding the market are no longer a single force of day traders, but multiple forces operating in parallel. Retail’s idol—the countless day-trader big shots—has already iterated the emotion-cycle model from the past, embracing the latest changes in the market. They’ve turned from retail into big players. So those small caps that used to comfortably hit limit-up with just a few hundred million no longer can hold their funds. They need to find new ways to play.

Day traders exiting the frontline isn’t because a certain big shot stops—it’s because the entire ecosystem changed. What consequences does that lead to?

First, no one leads the pack, and directions become chaotic

In the past, when day traders forged a leader, they would repeatedly guide, maintain, and protect it. If today’s board gets smashed, tomorrow they come back again. If there’s disagreement today, then tomorrow it turns consistent. From startup to main rally, from main rally to withdrawal, there’s plenty of time in between for you to react, for you to follow, for you to exit. Retail investors could enter along with the rhythm—drink the soup, avoid risk. If you踩对 the rhythm, making money is only natural. Now that day traders have faded out, who warms up the field? Quant strategies? Quants don’t warm up the field—they only harvest.
**
Second, relay trading becomes much harder**

Looking back over the last 3 months: since April, relay trading has been getting harder and harder. In the early stage, there were Sangyang Co., Ltd. (圣阳股份), Jin Tangle (金螳螂), Datang Electric (大唐发电)—they tried to carve out a relay play during windows where the trend weakened. That was the last stubbornness of day traders, the final glimmer of light at dusk. After that, Huanhuan Biology (四环生物), Xiangjiang Holdings (香江控股), Tenyu Digital (天娱数科)—the next day after a “weak-to-strong” move, they opened green and charged straight into the跌停. What is “weak-to-strong”? It means the stock had bad boards the previous day or was only sealed at the close; the next day, the auction opens higher than expected, gaps up quickly, and then seals the board fast. In the day-trader era, this was a golden entry point. But now? On the “weak-to-strong” next day, it gets directly smashed and crushed. Shenglong Shares (盛龙股份) and Hainan Haiyao (海南海药) have a bit of premium—like a candle in the wind—there’s a brief spike up, then as soon as the market shows even a slight breeze, it gets extinguished. Haixin Shares (海欣股份) is even worse: on the “weak-to-strong” day, it炸板 and plunged right away; the capital inside was buried directly.

Relay models are being ruthlessly eliminated by the market.

Trend-style trading has taken its place. Multiple technology heavyweights keep setting new highs in a way that doesn’t require consecutive limit-ups and keeps rising.

II. Quantification: fast in, fast out—round-trip harvesting

Quantitative trading uses machines with dedicated channels and large servers. They continuously loop through decades of stock-market data analyses on a minute-by-minute basis, with countless quant factors. They receive real-time messages, fully exploit market volatility, and harvest back and forth.

It has dedicated channels, millisecond-level orders, and algorithms that can precisely capture market sentiment. Before you even open your trading app, it has already completed the buy and sell.

Compare hand speed? It’s faster than humans by ten thousand times. Compare discipline? It has no greed and no fear; once conditions trigger, it buys; once conditions trigger, it sells. Compare coverage? It can simultaneously monitor all stocks across the entire market that meet conditions, and execute one-click bulk operations.

What happens when quantification runs rampant?

First, the lifecycle of themes shortens dramatically.

In the past, a theme could be traded for a week, even half a month. Startup, fermentation, climax, and withdrawal—its rhythm was clear, giving you plenty of time to get on and get off. Now it’s two days, even one day. Just this past Friday, a midday burst of commercial aerospace news hit. Related stocks surged straight up. Within dozens of minutes, the number of limit-ups in the sector was close to 50, then after that they fell in batches; the炸板 rate exceeded 50%.

Those back-row stocks: rush in at noon, then get nailed with a straight “hammer down” at the close. In half a day, it goes from heaven to hell.

Why does this happen? Because quant trading doesn’t care about emotions, doesn’t care about pattern, doesn’t care about faith. When the news comes out, the machine recognizes it and batches in. When the stock rises and triggers sell conditions, the machine batches out again and sells.

In the past, people had some “grasp”—some sentiment, a “I like this stock so I’ll hold it for a bit.” Quant has none. In the quant dictionary, there are only two words: buy and sell.

Second, good entries aren’t accessible; what you do get is a trap

This phenomenon has become more and more obvious in the last two years. When a theme explodes, it can hit a one-word limit-up that very day. The next day, the board opens and gets A-slammed. Many core stocks driving exploding themes are even those that continuously pushed up from continuous one-word limit-ups. For example, iReader Technology (掌阅科技) before the year: it started with 4 consecutive one-word limit-ups, opened high on the fifth board and instantly 秒板. On the day it upgraded to the sixth board, it opened low and directly跌停.

HuaSu Holdings (华塑控股): a 4-board “weak-to-strong” on shrinking volume and 秒板 (it could only be bought before 9:25). Based on the high sentiment and consistency at the 4-board stage, the 5th board should have been a scenario you couldn’t buy into. But the call auction allowed people to buy, and the same day delivered a “天地面” setup.

Countless people watch the stock rise and can’t buy, so they just stare helplessly. Finally when it opens up, they all rush in—but when they look back, they realize: if you bought it, it was a big trap.

Such cases are truly countless. Careful friends can go back and summarize: from last year to this year, which specific themes and core stocks showed this kind of trajectory.

Before, many people told you: buy the core, don’t waste effort on junk. Because junk is like a bad boyfriend. But now I want to tell you: don’t waste effort on so-called “core” stocks that you can’t buy. If it’s not yours, don’t have your eyes on it. A forced melon isn’t sweet—it also hurts your mouth. Only what you can actually eat is the sweetest and most relieving.

III. Institutions fully control the market and lead it

There are also people who see endless online headlines like: “The ChiNext index breaks historical highs,” and think A-share has entered a new era bull market. With an average daily $30 trillion? (Actually: 30k亿) wait—we should translate correctly: “an average daily 3 trillion yuan turnover” market with abundant liquidity means there’s plenty of money, so they come to the stock market to “take a bit.” The result is that instead, the market “takes” from them—taking away their own account and their paycheck again and again.

So, holding onto the cycle and strategies learned from the internet, they arrived at the market with swagger, trying to make a big move and write a myth of their own.

But the problem is: the core entity money in the market has already changed. It’s become institutions.

Who are institutions? Public funds, insurance capital, and social security funds—these are the real big chunks in the market.

Institutions hold the largest volume of market funds and control the current most core pricing power. They decide trend direction, they pave the hotspot tracks, and they control the pace—fast or slow.

As the saying goes, know yourself and know the enemy—you win in every battle. Let’s do a detailed breakdown of the institution-led market.

First, positioning of sectors and stocks is confusing

In the past, day traders did relay trading—emotion, rhythm, leader driving the sector. Institutions do tracks, trends, and pave a piece of growth on top of another. In the day-trader era, the division of labor was clear: the leading leader stock runs first, the follow-up core stocks fill in, and the rhythm was crisp. It was obvious: who is the overall “general” of a trading wave, who is the follower and supplement, and who plays the “main battalion.” In the institution era, there is no single core leader that runs through the entire process. Leading stocks keep changing; each sub-concept has its own leader. Today it’s your turn to rise, tomorrow it’s his turn, and the day after tomorrow it switches again.

Looking back, the core stocks of each sub-concept all doubled or even tripled. But at the time, it was called “opening the books and facing four directions, confused.” When looking back, you simply can’t tell which one was truly better. Every stock is the industry leader, every concept is a core driver.

As for judging based on fundamental research to determine qualitatively? Institutions have the capability to conduct offline company visits, talk with chairmen, tour production lines, and discuss development blueprints. Their advantages are large capital, early information access, and sufficient depth of research. For an industry, an institution can nurture dozens of researchers covering everything from upstream to downstream. But retail investors can only find资料 on the internet—passed around so many times that nobody knows the accuracy—and even then they don’t have the professional capability to read them clearly. They end up understanding only half, with confusion on both ends.

So when prices rise, retail finally figures out who the leading core is and chases in—then gets trapped on the top of the mountain.

Second, big caps accelerate and terrify retail investors

In the past, we learned to trade emotional small caps: the stock has clear multiple attributes and positioning. Within a sector, the one that hits the first limit-up, with price under 10 yuan, market cap not above 5 billion, volume-price relationship looking good, and even the name has requirements—if it’s the Year of the Dragon, it should have a “dragon” in it; if you’re “trading a map,” it must include place names. There were also slogans like “dragon leader” headlines. The 2nd and 3rd boards kept getting ruined; the 4th and 5th boards needed weak-to-strong.

Now this entire understanding is completely overturned. People are trading stocks priced at dozens or hundreds of yuan; the time of hitting limit-ups doesn’t matter in order. Fundamentals must be authentic; market cap isn’t capped either. Stocks with market caps in the hundreds of billions—or even thousands of billions—can still rise without exception. And the volume-price relationship—stocks keep rising through disagreements; intraday minute-to-minute charts are full of twists and turns. Where is the volume-price relationship for you to analyze? Maybe it still exists—you just have to use 15-minute or 30-minute K-lines.

In the past, it was necessary to be cautious with limit-ups by big theme stocks. Now it’s different. Big caps with market caps of hundreds to thousands of billions can still play “accelerated boards.” Retail investors can only watch as it keeps breaking through while still tied to the theme, unable to defeat the bottom line in their hearts—without adding speed, without adding speed; and what’s worse is the acceleration of a super big cap, still with continuously shrinking volume on the acceleration.

But in reality, accelerating big caps means institutions are locking positions. Institutions are inside, covering it while laughing under their breath; retail is outside, clutching their heads and crying.

**Third, the theme rotation rhythm is chaotic
**
At present, theme moves can be divided into four major phases:

Early startup: themes rotate into rising momentum; there is no massive breakout at first, but height emerges almost unknowingly. At this time, retail investors haven’t noticed, while institutions quietly add positions. Mid development: during the upswing, there isn’t much major disagreement, making it hard to judge a clear rhythm. Retail hesitates and watches; institutions continue to build their positions. Late acceleration: with weak disagreement but continuously rising price action, the theme suddenly explodes and the sector index prints a big bullish daily candle. After a brief acceleration, it starts to turn—retail rushes in right at the climax. Late-stage withdrawal: once the trend withdraws, it’s not something that happens in a single day. Continuous selling with no resistance, sentiment sinks. When the bag-holders finally cut losses and exit, repair arrives. And when repair turns into a new climax, those who enter get trapped again.

The market’s rhythm and the rhythm retail learns—startup acceleration climax and bottom—are completely different.

Previously, theme cycles were defined day by day: today how, tomorrow what. Now it’s intraday. Today’s open creates one kind of rhythm, midday changes again, and the afternoon turns into another kind of change.

对应的，散户做趋势，有两大天然劣势：
Small capital base, cannot split positions to roll T. Under T+1, institutions with large capital are not severely restricted. Unlimited bullets flow; they’re not bound by “gunmanship.” Retail doesn’t have this condition: once you buy, you’re full; once it drops, you panic.

Short market memory; chasing and killing causes chaotic timing. When a theme explodes, it’s at the climax. Retail always enters at the climax and catches the very last baton. You only remember what was strongest yesterday; the day before yesterday’s strength is already forgotten. But now, unlike the old relay era—when there was a leading dragon leader, core follow-ups had clear roles, and the rhythm was clear.

Once you understand the current institution-led market, and how themes are guided by trend stocks, you’ll know—when to strike and when to stop.

Fourth, market noise makes it hard to grasp

The first noise: short “mini-essays” A few days ago, [size=small] a post could make a stock hit a one-word limit-up, then quickly fall back to its original state.
Studying fundamentals for half a day isn’t as good as someone writing a joke. Estimating valuation for half a day isn’t as good as someone posting something.

That’s the market now—inundated information, hard to tell truth from falsehood. The “boss” cooperates with mini-essays to distribute shares; quants follow the mini-essays to push up; retail follows the mini-essays to take the bag.

Round after round, harvest one crop after another.

Of course, this phenomenon will become less and less in the future. This time, relevant departments promptly reported and investigated, launching a strong crackdown, providing strong protection to stabilize the trading-market environment for us.

The second noise: self-media

All over the streets are “half-baked” teachers talking about “emotion cycle.” “Dragon strategy,” “weak-to-strong,” “disagreement to consensus”—they just repeat day-trader-era buzzwords. They speak confidently, citing classics and reasoning well. But what they don’t tell you is—day traders have already stepped back. The kung fu you’re learning is from the last era. What you face is this era’s battlefield. Trying to use cold-weapon tactics to fight modern warfare—the outcome is obvious. These half-baked teachers take your tuition and teach you a pile of outdated stuff. You still think you’re not skilled enough, but actually it’s the market that doesn’t recognize the technique you learned. It’s like you trained boxing for three years, got onto the ring, and realized your opponent is holding a gun.
**
The third noise: regulation**

Trading halt rules are unclear—like a knife hanging over your head. You don’t know whether it will fall this time.

After the market finally builds height, regulation slaps it down.

Do you say there are rules? There are. But the rules are vague—“depends on the situation.” This leads to hesitation when it hits key nodes—will it be suspended this time? Should I run early?

Once you hesitate, the rhythm gets messed up. And when it gets messed up, it’s easy to trigger stampedes.

Regulation dislikes the mess left behind after a theme is fully traded and becomes one ground of broken glass. It’s like parents seeing their child follow a bunch of street troublemakers and wreck the home—worried the child learns bad habits, and worried the house gets dismantled.

But the problem is: you can’t guess the timing of regulation’s moves.

Unusual-move regulation, window guidance, and suspension verification—when they come, how strong they are, and who they hit—there’s no clear pattern. This leaves short-term funds treading on thin ice, nervous and on edge.

These three noises—mini-essays, self-media, and regulation—overlap and amplify each other, making the market even more chaotic and even harder to grasp.

V. The external environment keeps disturbing the market

In the past, A-shares looked at the mood of US stocks, and I could tolerate that. Now I also have to look at the mood of Korean stocks—it’s a bit unbearable.

Especially this year: first, the US-Iran conflict triggered global turmoil, and A-shares suffered undeserved disaster. Then, the Korean stock market kept rising, and semiconductor-linked in A-shares went strong and rallied. In the end, the problems came from within Korea itself—financing funds made up too large a proportion, leading to continuous declines, forcing A-shares to follow down.

Now every morning when you wake up, you first check how US stocks performed last night. Korea opens 1.25 hours earlier than A-shares, so before A-shares opens, you still have to watch Korea’s performance. Its gap up or gap down—even directly determines the opening tone of A-shares’ three major indices.

You also have to guard against Korea getting a sudden circuit breaker while A-shares is on midday break. Its circuit breaker is more decisive and clean than A-shares small caps hitting跌停—falling without dragging.

VI. Summary of the moment

This is the best era and also the worst era—put it into the stock market, and it applies just the same.

What’s good? Limit-ups across hundreds of stocks appear frequently; trillion-yuan? (No: “千亿大票” means hundreds of billions.) and heavyweights lead the rise; the money-making effect has never been lacking—only the “hand” that captures it is missing. Countless individual stocks break through and print height. Trend-heavy stocks keep making new highs in a way that doesn’t rely on consecutive boards and keeps rising. Opportunities are everywhere, as long as you find the right direction. No one can absolutely dominate—this market gives every adapter a fair chance. Institutions get harvested by quants, day traders get picked up by institutions, and quants are also pinned down by regulation. There are no permanent winners—so there are no destined losers.

What’s bad? Extremely high requirements for retail investors. Without a fixed belief, there’s no one-size-fits-all “one move that makes you rich forever.” In the past, learning a trade could last three years. Now it becomes outdated in three months. You need to understand external linkages, understand institution playbooks, identify quant rhythms, avoid the mini-essay traps, and infer regulators’ intent. Any mistake in any link means losses.

With the market so chaotic, how do I survive?

The answer is: watch the market from a linkage perspective, then review, simulate, and summarize.

This is the outline of my article. Just by the title, you’ll know how I dealt with the hellish market in July.

In my 7.1 review, I said: wait for disagreements, don’t chase highs, and absorb the panic around the four core positions in the middle of the day. As a result, the next day SinoBio? (有研硅) gave a chance to buy the -18 bottom, easily taking away 15%.

Starting from my 7.3 article, I only had one contingency plan: use every disagreement in semiconductors as an opportunity to low-buy the semiconductor equipment ETF. It went very well—until Friday morning. If you held without moving, you had over 20% profit; if you did T, you could have 30% profit. And in my 7.9 review, I said: on Friday, do only one thing—sell well, don’t chase, and wait until the disagreement ends. It also perfectly matched my simulation.

Trading is simple, and risk is low. My tools are very simple: just a table.

Use it to record theme rhythms and the leading core.

Once you understand this table, you’ll understand how different themes surge and alternate in cycles, and how themes inside rotate and switch. Once you grasp these, trading becomes simple.

Next post preview:

After finishing “Why is it so hard?” and “What changed?” in the next one, we’ll talk about—the concrete response methods for trend-chasers in the current market.

I will tell you: in this market environment, exactly how to watch external linkages, how to identify theme rhythm, and how to follow institutions’ direction. How to set the tone in the opening auction, how to game intraday, and how to wrap up at the close. When to rush in and when to pull back. How this table of theme rhythm is actually made—how to read it, and how to analyze it.

In the next episode, it’s all practical trading content—waiting for you. The writer is the biggest beneficiary. But for one person, crouching at their desk late at night, writing this article, making multiple revisions and refinements in the middle—it takes motivation. If this article touches you and helps you gain insights, please support me. And your likes and tips—hell, even just clicking like or leaving a comment—are a huge encouragement to me. Meeting is fate. Hope we can progress together. In the comments section of today’s article, everyone can post trading-related questions, and I’ll do my best to answer.

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[Red packet] When the market is this tough, how can linked players break the deadlock? (I)?

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