A Niu Zhitou: How to recover from being deceived? What are the risks of stock bottoming?

In the stock market, many investors hope to buy stocks when the cost price is low, so that there will be a large number of investors in the market who pursue bottoming, but any way is risky. So what are the risks of stock bottoming?

1. Market trend bottom reading

If the market is at a low level of "bear market", most of the stock prices in the market during this time period are in a relatively low state, and the adjustment is limited according to the market trend. The trading volume of market stocks is also in the downturn, short-side funds are at a dominant low, and the investment sentiment of the market is also in a poor stage.

If investors carry out bottom reading in this time period, they need to pay attention to the market's bearish strength or bearish news may be intensified to continue to guide the market to continue to fall and adjust. Just like the market in October 2018, when most investors believed that the low of the Shanghai index was near 2638, but under the influence of the subsequent bearish force and bearish news, the market reached a new low.

2. Market policy bottoming out

The A-share market is a policy market. When the market is in the "bear market" stage, the state will give a lot of "rescue" policy news to promote the enthusiasm of market investment and make the disk index and individual stock prices pick up.

If investors read the bottom in this time period, they need to pay attention to the "rescue" policy news given by the state and whether the follow-up market "buys". Just like the "bear market" stage in the second quarter of 2015, the state gave a lot of "rescue" policy news. However, the overall market has not changed, and it is still in a downward trend.

3. Market valuation bottoming out

When the disk or stock is at a low level of "bear market", the disk or some stocks are undervalued in the market. Many investors will think that if they buy a low-priced stock that is undervalued by the market, then the bottom buying will definitely have a greater probability of profit in the long run.

However, when the market is mostly undervalued, it means that the overall market is in a downturn. If investors intervene in undervalued stocks in this time period, it is likely to bring a longer investment time and sluggish funds.

In general, bottom reading is a very risky way of investment trading, to know that there is no absolute bottom of individual stocks or disks, only relative lows. Investors try to do as little as possible to do bottom-reading transactions, the grasp of the transaction in the year-on-year upward trend is low, and investors do bottom-reading transactions have higher requirements for the trader's own mentality and execution.