Charmander Classroom is now in session: Shakeout or Dump? Understand the Main Player's Strategy in One Article

Recently, many fans have been asking in the comment section: Brother Long, Brother Long, I have so many shares that I easily sell them too quickly and can’t hold on. What should I do? After reading this article, I believe you can learn how to handle it as well. [Includes images for better understanding] [Taogu Bar]

The most painful thing in stock trading is: thinking it’s a distribution and selling quickly, only to see it soar (shakeout and sell-off); thinking it’s a shakeout and rushing to buy the bottom, only to end up hanging at the top and getting blown away (distribution and taking over).

How exactly can we distinguish these two “two faces” of the main force? Today, I’ve organized the most core differences. I recommend liking and saving this first, so you can compare at any time during trading!

Identify the core purpose at a glance:

Shakeout = “Scare you”: The market maker aims to shake out retail investors with weak resolve, raising everyone’s holding costs, making it easier to push the stock higher later! Usually occurs around the mid-mountain of the stock price (during the ascent).

Distribution = “Tempt you”: The market maker creates the illusion of a big rise, attracting follow-up traders to buy in, so they can cash out and run! Usually happens at the high point of the stock (stagnant zone).

The most solid evidence: Volume does not lie! (Key point!)

Shakeout characteristics: Decreasing volume during decline. The candlesticks look fierce (like big bearish candles), but the trading volume shrinks significantly, like a faucet turned off. This indicates the main force is holding their position, and retail investors are panicking and selling.

Distribution characteristics: Volume surges during stagnation/downtrend. The stock oscillates at high levels or declines slightly, but the trading volume is huge, like a dam releasing floodwaters. This shows the main force is frantically selling off their holdings!

Psychological game: When you feel hopeless and fearful, just wanting to cut losses and leave quickly, it’s often the end of a shakeout. When you feel excited and greedy, afraid of missing out on a billion and want to go all-in, it’s often a trap of distribution.

Finally, a tip to avoid pitfalls: Be cautious of volume at high levels, don’t abandon your position easily at low levels. When you can’t see clearly, controlling your position size is the best defense! If you’ve learned this, remember to give a like. Share in the comments if you’ve ever been “deceived” by the main force.

Next, I’ve prepared some images to help everyone understand better:

[Images omitted for brevity]

If this article has been helpful to you, please follow us, and leave “168” in the comments to keep moving forward together! Every like you give is my motivation to keep going, helping the new account grow steadily. Save and like so you won’t get lost, follow for warm exchanges, and I look forward to walking alongside everyone on the long road of investment, growing together.