《You think the main position is washing the market; actually it’s bringing your cost down to a level you can’t imagine》

Many people say “buy the dip” on their mouths, but what they actually do is chasing after price spikes.

During the monthly chart bottoming-out phase, what you truly need to look for is not just any random low point, but the lowest point at each stage within this bottoming structure.

Why?

Because bottoming-out usually first prints a stage low, and then it repeatedly oscillates around that low—pullbacks to confirm.

What you need to do is wait until it comes back close to the low zone that has been repeatedly verified earlier, and only then consider buying the dip.

It’s not that the stock just rebounds by a few dozen points and you rush in excitedly while shouting “buy the dip.”

That isn’t buying the dip—that’s imagining you’re bottom-fishing at a stage high.

A normal monthly-chart oscillation can be dozens of points. Once your cost is too high, a dip will make you question life; a bounce up will make you舍不得 sell.

By the time the real big uptrend comes, you’ve already been ground down in the earlier oscillations.

So, for monthly-chart players, the first thing isn’t being afraid of missing out—it’s bringing their cost down.

With a reference for the lowest point, you wait for the pullback to the low zone; if not, you keep waiting.

The market opens every day. Opportunities won’t disappear just because you didn’t buy today.

Your biggest problem is that you’re too anxious.

Anxious to buy, anxious to make money, anxious to prove you didn’t miss out.

In the end, every time you enter, your cost isn’t low enough. Later, during a normal oscillation of dozens of points, you start to howl.

Real experts aren’t scared of bottom oscillations at all.

Bottoming doesn’t mean it rips upward immediately after one big bullish candle. It still needs to break through, pull back, confirm—and repeatedly exchange hands of chips, slowly grinding out the uncommitted.

The process has to happen.

No large fund is stupid enough to just take a little bit of chips and then immediately pull the big uptrend.

They also need to use repeated bottom oscillations to continuously optimize their holding cost, while gradually concentrating chips in order to prepare for the next big uptrend.

That’s why you see a stock’s bottom average price around 20 yuan, then it rises to 40 yuan—and you think the big money inside only made a single times profit.

You’re thinking too simply.

They might already have been rolling and operating repeatedly during the bottoming phase, bringing their comprehensive cost down to below 10 yuan.

When the price rises to 40 yuan, you think they made one times profit. They may have been multiple times already.

Why aren’t they afraid of oscillating by dozens of points?

Because oscillation is exactly the battlefield they’re most familiar with.

When pushed down, the floating supply starts to loosen; when pulled up, the follow-on crowd starts entering; when pushed back down again, chips continue to exchange.

While you’re suffering from the volatility inside, they’re optimizing their cost. While you worry about up and down every day, they always have the initiative.

So, during the monthly-chart bottoming phase, the way for people who can trade in swings is actually simple:

Hold the core position at low levels, let it oscillate upward by dozens of points, and sell part of the position at high points; when it pulls back to the low again, buy the position back.

Don’t easily lose the core holding; let the tactical position roll along with the monthly structure.

Slowly accompany it, and bring your own cost down as well.

If big funds can use oscillations to reduce cost, why can’t you just stand in there and get hit?

Of course, it’s fine if you can’t do swing trading.

There’s another type of operation that looks the simplest, but is equally an expert-level method:

During the monthly-chart bottoming phase, wait for it to return to the stage low, buy there, and hold all the way to the historical heavy-pressure zone on the monthly chart—and even the quarterly chart.

Ignore all the up-and-down swings of those dozens of points in between.

If you can’t do swing trading, then don’t force it.

If you sell at a high and miss the re-entry, you won’t dare to take it back. If you buy the dip again and again, you end up buying on the mountainside. After a few operations, not only do you fail to bring costs down—you end up messing away all the original low-level chips.

Then it’s not as good as buying low enough in the first place, then closing the intraday chart and the daily chart, opening the monthly chart and quarterly chart, and finding the true historical heavy-pressure zone for the future in advance.

After that, leave it to time.

From the monthly-chart bottoming area to the historical heavy-pressure zone, when you encounter a company that truly completes the cycle reversal, the upside is often not dozens of points, but possibly several times.

This kind of operation looks like it has no technical content, but in fact it’s extremely difficult.

Because it requires you to understand the big cycle, endure small fluctuations, ignore the temptations and threats of those dozens of points in the middle, and finally hold to the true monthly-chart-level profits.

Can do swing trading—then you’re an expert.

Buy at the monthly-chart low, ignore the volatility, and hold all the way to the historical heavy-pressure zone—also an expert.

But there’s one most important prerequisite here:

The company itself must have no problems.

Long-term holding can’t only look at charts; it must follow the “four-part routine” of fundamentals: confirm the company’s operations are normal, the industry logic hasn’t been fundamentally broken, the financial structure hasn’t deteriorated noticeably, and that there is a foundation for a cycle reversal in the future.

Afei’s own screening principles are also direct:

If the market cap is below 10 billion, try not to look.

Small caps may look like they have big elasticity, but their uncertainty is even bigger.

Long monthly-chart holds aren’t betting on whether a single company will suddenly turn around; it’s waiting for it to complete the cycle reversal with sufficiently low cost, under relatively reliable fundamental conditions.

So, during the monthly-chart bottoming phase, there are basically only two correct ways to play:

If you can do swing trading, keep the core position and use the oscillations to slowly lower cost.

If you can’t do swing trading, buy at the stage low and hold it stubbornly all the way to the historical heavy-pressure zone on the monthly or quarterly chart.

The most frightening is the third type of person:

You can’t do swing trading, and you can’t hold for the long term.

You buy at the bottom and stare at the intraday chart every day; when it drops, you panic and cut loss; when it rises, you’re scared of missing out and chasing higher.

In the end, while someone else completes the bottoming, you complete selling high and buying low.

Remember one sentence:

In a monthly-chart bottoming phase, oscillation isn’t the risk—cost being too high is the risk.

If you don’t have patience at the bottom, you’ll never wait for the big uptrend. If you don’t have a cost advantage, even if you correctly see the big trend, you’ll die before the night before the big uptrend.

Alpaca isn’t afraid of its shaking; it’s only afraid it won’t give alpaca a low price.

It handles the process; I handle waiting for it at the low.

If you can do swing trading, I’ll lower cost with it; if you can’t, I’ll hold the low-level chips and wait for it to walk to the historical heavy-pressure zone by itself.

The real skill of monthly-chart players isn’t having trades every day—it’s buying low enough, holding long enough, and finally selling at the place where there is truly pressure.