How do you get cut every time the market drops?

When the market goes down, it’s like stepping down stairs—four steps in total.

**Step 1: Weak Rebound**
The price jumps for two days but can’t even reach previous highs. You think: Is this a shakeout? Hold on and try again. But then it gets hammered down.

**Step 2: Support Breakthrough**
The last support level is directly broken this time. Looking at the chart, you think: Did it really break? Should I open a short? Or maybe it’s just a trap. Hesitating, you get slapped back by a rebound.

**Step 3: Wave-by-Wave Decline**
Each rebound is lower than the last, dropping a bit then bouncing back, but the bounces get weaker and weaker. You think: It’s fallen so much, it should bottom out soon, right? But should I take profits first? In this dilemma, a reversal comes.

**Step 4: Accelerated Drop with Long Lower Shadow**
After a sharp decline, a long lower shadow suddenly appears, and the price quickly recovers. You think: The rebound has started! Short position is losing! Is a reversal coming?

The key is— as long as you try to predict the bottom, the market will give you a perfect reversal candlestick. Then it keeps fooling you into entering.

So how to break the cycle?

Stop predicting the market. Instead, focus on key levels (structural highs and lows) + high-probability signals (overbought conditions with divergence) + appropriate position size (your acceptable loss limit).

With this approach, missing one or two reversals (the money you’d lose on a reversal) can actually help you catch the entire trend’s true reversal.