He Xun Investment Advisor Guo Xuguang: 4000 officially breached! How to escape and rescue yourself in a downtrend?

On March 20th, Guo Xuguang from Hexun Investment Advisory stated that today’s market performance once again confirms the saying: During a downtrend, all rebounds are opportunities to escape. Although this has been emphasized repeatedly before, some people still hold onto hope, thinking that the 4,000-point level might signal a reversal, without considering the powerful force of the bears in a downtrend. Especially when there is no disagreement within the bearish camp, how easily can the trend change?

Many friends may now feel very conflicted, saying they are already trapped with a loss of twenty or thirty points and can’t bring themselves to cut losses. But remember, 4,000 points is just a “toll station” for A-shares; the real defensive battle for A-shares has always been around 3,000 points. If things reach an extreme, at that point, will the twenty or thirty points trapped now matter?

For those who have already realized the risk and want to struggle to reduce losses, listen carefully to the trading strategies I will provide. The strategy is divided into two phases: The first phase is during the bearish downtrend, and you should be mentally prepared to “lose chips.” Since all rebounds are good opportunities to reduce positions, decisively cut some during rebounds, and consider re-entering during declines. However, there might be situations where you can’t re-enter, which is a “reduce 2 - 1” operation, but that’s okay. Our initial goal is to struggle a bit and avoid being deeply trapped.

The second phase is the strategy during rebounds. Know that the move from decline to rebound is not a single point but a process, a stage where short-selling funds may diverge. A notable feature of this phase is the increase in trading volume. When volume expands, don’t rush to act; wait until a genuine rebound trend appears before moving into the second phase. At that point, be more courageous, as the risk of being trapped decreases. Our task is to “add,” such as combining “reduce 1 + 2 - 1 + 2” operations. Ultimately, we will form two models: one is an inverted pyramid, and the other is a regular pyramid. Feel free to analyze and develop your own strategies.