Retail investors are the true weathervane of the A-share market.

Without retail investors, the A-share market would be a stagnant pool of water, devoid of vitality.

It's not that capital enters the market purely to "mow the leeks" (a metaphor for inexperienced investors who are often taken advantage of), but the behavior and mentality of these leeks are an important indicator for capital to predict the direction of the market.

Because behind the game of capital is the game of human nature, and retail investors are the representatives of human nature.

The earliest call for this round of market movement started at the end of July.

By the end of August, the reduction of stamp duty was the "climax" of the market, but it also marked the beginning of a significant downturn.

At that time, every leek in the market thought that a big bull market was about to start, but they failed to realize the arrival of risk.

Every time the market was hyped, it was so convincing, especially the official public information, which made everyone believe in love again and again.

Advertisement

Love comes too fast, just like a tornado, sweeping through and leaving a mess behind.

If you were to write a storybook about these five months, the plot of the retail investors would be like this.In August, fully invested; in September, waiting; in October, suffering; in November, doubting; in December, despairing.

When a full five months have passed and it's the end of December, in a word, don't deceive me, I no longer believe in love.

To describe the market in two words: ruthless!

The ruthlessness of capital is vividly reflected in this capital market.

When the market, in a good posture, gives a rebound to close, many retail investors no longer believe in the 2024 market, eager to run, and their words are full of various complaints.

After a year of beatings, at the end of the year, a candy is given, and they want to deceive me again, no way!

Not until 2800, not until 2700, not until 2600, resolutely do not bottom-fish!

If you still want to make money, if you can return the money to me, I will resolutely not play anymore!

From a period of optimism waiting for the market to be rescued, to a period of panic where they want to run when they see an increase, it took nearly half a year.

The market, with its actual actions, has changed the three views of retail investors, erased their hopes, and harvested the bloody chips.On the first day of the rebound, many retail investors obediently reduced their positions, handing over their chips to others.

Let's not discuss whether this is right or wrong, but the changes in the trading mentality of retail investors are closely watched by the market.

In other words, the current trading mentality of retail investors may directly determine the future market trend.

So, what is the current state of retail investors?

First, they sell out as soon as they break even, take the money back, and stop playing.

This mentality is actually quite common among stock investors, and a large part of them are also mutual fund investors.

These are the "leeks" who were deceived by the market into buying at high levels in 2021, many of whom know nothing about the stock market.

It is said that there will be a rebound, and they can break even and leave, so they keep adding to their positions.

But after about two years, the more they add, the more they lose, and they have no money to add to their positions, let alone dare to add to their positions.Some who couldn't bear it have already closed their accounts and left the market.

There are also some who insist on waiting for a rebound, even if it's just to cut their losses, and are ready to leave the market.

There are also some who, as long as they don't lose money, will sell and take back their principal, then say goodbye to the market.

These retail investors are under tremendous mental pressure and have a relatively pessimistic view of the market, which makes them easy to give up their chips, and they are the main targets for the main force to harvest.

Of course, the main force will not act as the People's Liberation Army, giving money to these investors, unless they are willing to cut their losses at a low position, otherwise they will avoid the sectors and stocks they hold heavily to speculate.

That is to say, even if the market unfolds, it will not allow these people to break even.

Second, completely lie down and not move, the rise and fall have nothing to do with me, I don't believe it.

Don't talk about the bull market anymore, I don't believe it, which is also the main mentality of another part of the retail investors.

Their performance is very negative, but they have not thought about cutting their losses and leaving the market.

For example, some retail investors who took over at high positions in 2021, holding large white horses, many of the declines are between 50-70%, it can be said that they have completely lain down and not moved.For the main force capital, the lying flat of these retail investors is also acceptable.

Because the stock price has fallen sharply, it has actually reserved space for capital to make a market.

A stock that was 100 yuan, fell to 30 yuan, and rebounded to 50 yuan, with a space of more than 60%, which is enough for the main force to play with.

The main force would love it if the retail investors lay flat, so the pressure of their capital operation is very small, and it is also very convenient to operate.

These retail investors who have already turned into zombies, when they move, it indicates that the market has risen, and the zombies have resurrected.

In fact, when the zombie retail investors resurrect and start discussing stocks, it is not far from the end of the market.

Third, they are entangled when they see a positive line, and feel relieved when they see a negative line, and are at a loss.

There is another type of retail investors who have been tortured, and their mentality is more complicated.

If you have to use a word to describe it, it is called hesitation.

Hesitation refers to being afraid of falling, and even more afraid of rising.Afraid of falling, it's easy to understand, falling means losing money.

Afraid of rising, in fact, is afraid that the rise, oneself still does not make money, a cycle of rise and fall and lost again.

The market is not broken through 3000, and then back to 3000, it is not a profit and loss, many times, it has been hovering around 3000 points, but the money has been lost.

When the market rises, one's own stocks can't outperform the index, or miss it repeatedly, which is more painful than lying flat when falling.

In addition, when the market rises, it is also very entangled for retail investors whether to increase their positions or reduce their positions.

Increase the position is afraid that it will fall again, reduce the position is afraid that it will rise and miss it, the mood swings repeatedly.

For the main force, this is a standard leek, a few fluctuations can play this part of the people around and around.

The key to the problem is that the mentality is dynamically changing, give you a three-month rise in the market, and retail investors will start to believe that the bull market is coming.

This is human nature.Human nature is such that capital never fears that you won't fall into the trap, because interests will continuously tempt you.

They either do not untie the knot for you, or they let you miss out, with the ultimate goal being to make you take over at a high position.

Even if at some moment, the retail investor's heart is as dead as ashes, they can be rekindled at a certain stage, making you believe again.

It is said that one should not test human nature with money, yet the stock market is testing human nature with money every day.

If retail investors cannot overcome human nature, then it is very difficult to make money.

All public information should not necessarily be interpreted in reverse, but do not let the news that everyone knows to stir emotions.

The market's bottoming out is not stimulated by news, but naturally reaches the bottom.

Therefore, when the market peaks, there will naturally be no major bearish news, but capital will stealthily flow out.

Why do many experts study cycles when doing stock trends, because behind the cycles, it is actually human nature.

The laws of nature are the laws of cycles, it is that magical.At the moment, when retail investors are still skeptical, it is a great opportunity. When everyone's confidence is restored and they believe that the bull market is back, please remain cautious, because the bull market does not come so casually.

Confidence is gold, but please do not be blind. Overcoming human nature is the key to not being a "chop" (a term used to describe inexperienced investors who are easily taken advantage of in the market).