There is a saying in the stock market, "He who can buy is an apprentice, he who can sell is a master, and he who can keep his hands off is the patriarch." This means that if you can't grasp the selling point even if you grasp the buying point, you will still suffer losses. If you don't know how to keep your hands off during risky times, no amount of money is enough to lose. "Uncertainty in the trend" is a huge risk that cannot be grasped, so we should try to avoid this risk as much as possible.

1. Index Decline

The index of the stock market represents the overall performance of the market. When the overall performance of the market is poor, the index will also decline. If the decline of an index is greater than that of other indices, it is usually a sign that the market may experience a sharp decline.

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2. Decline in Revenue and Profits

Revenue and profits are the core indicators of a company, reflecting the company's business and financial conditions. If a company's revenue and profits decline, it usually means that the company is facing competitive pressure and insufficient market demand. This may lead to a decline in the company's stock price and even trigger a sharp decline in the entire market.

3. Block Trading and Capital Withdrawal

Block trading and capital withdrawal are usually caused by institutional investors. If institutional investors start to withdraw from the market, it is usually a sign that the market may experience a sharp decline. This may cause more investors to follow the pace of institutional investors, thus triggering a sharp decline in the entire market.

4. Political and Economic Instability

Political and economic instability is usually one of the reasons for stock market fluctuations. For example, changes in government policies, international trade frictions, geopolitical risks, etc., can all lead to market instability. When political and economic conditions are unstable, the stock market may experience significant fluctuations.In summary, sharp declines in the stock market are not sudden occurrences but are usually preceded by signs. By paying attention to the overall market performance, company revenue and profitability, capital flows, as well as political and economic conditions, one can detect market instability in advance and take corresponding measures to reduce risks.

Firstly, we need to understand the "four principles" of stock selling:

1. The principle of selling early rather than late. Decisively cutting positions in the early stages of a decline is always the best choice. If the opportunity to sell is missed, especially after a significant drop, one should not easily cut positions but wait for a rebound to reduce losses. If the rebound fails again, one can consider a stop-loss based on the situation.

2. The principle of selling when a stock continues to decline or even actively sells off. If the main force is deliberately shorting, it indicates a huge space for the decline, and it is impossible to predict its support level. The best method is to sell in a timely manner.

3. The principle of selling when encountering a medium-sized black line. If a stock's decline exceeds 4% and shows no signs of turning around, one should be wary of the risk of a large black line or even a limit down. When the momentum is not good, one needs to "cut off the arm of a brave man."

4. The principle of selling when a stock or the overall market breaks through an important support level. At this time, it is important to pay attention to the effectiveness of the break. If it can rebound quickly after a short-term break, it is a false break.

1. Look at the K-line, a large volume at a high position, and the stock price is only at the top.

After the stock price rises to a high position, a large trading volume appears, and the subsequent strength of the bulls is hard to be illusory. The stock price fall is just a matter of time. If a large trading volume appears in the early rise of the bottom, it is a buy signal and should not be sold. If a large trading volume appears in the declining chart, treat it the same as the top, and it is advisable to sell.2. Dark Cloud Cover, Sell Immediately.

The term "Dark Cloud" refers to when the stock price rises to a high level, and one day a large bearish candlestick appears, which opens high and closes low, covering the previous bullish candlestick. This is called "Dark Cloud Cover". The emergence of this pattern indicates that the profit-taking orders are being liquidated, and the stock price will experience a period of adjustment, so it is advisable to sell the stocks.

3. MACD Divergence at the Top

MACD divergence at the top is a basic technique for assessing the sale of stocks. When the indicator shows a death cross, it means that the divergence at the top is starting, and the success rate of investors selling stocks at this time is relatively high.

4. Sell on Double Top in Stock Price

The double top pattern represents a reversal at the top, and a decline will follow later. The following figure shows a trading example of a double top pattern in the crude oil market. After this pattern appeared, the market experienced a significant drop. The second peak did not exactly reach the price of the first peak, but they only differed by less than one US dollar. Once the market starts to fall from the second peak, especially when it breaks through the neckline, there is a downward gap and a large bearish candlestick in the market. Traders who recognize this warning signal should look for opportunities to trade in line with the trend. Smaller time frame charts can be used to find entry points.

Danger SignalI. Selling Points at the Top of a Major Wave Band

1. Generally, they appear in a pagoda-like pattern during the rise to the secondary top

In this situation, the market sentiment is strong, and dark horse stocks emerge frequently. Most people buy today and reap substantial profits the next day. Despite the implementation of bearish measures, the market still perceives them as bullish. Trading volume continues to surge, and the index moves far away from the moving average. Most investors believe it is a good time to buy. However, stock market experts are prepared for the market and individual stocks to continue rising after selling. They reduce their positions in a pagoda-like manner, selling only and not buying. Such operational actions require investors to have the courage for contrarian thinking and a calm mindset.

2. Sell at a loss to preserve half of the territory

At the top of a major wave band, investors miss the opportunity to sell due to misjudgment or slow response. When they see a large black stick on the K-line, indicating an imminent bearish trend, they still maintain a bullish sentiment and hesitate to sell on the rebound. This is a common mistake made by investors. The correct approach is to sell half of the position at this time, with the aim of increasing the position and reducing costs when the market falls to the bottom, so as not to lose everything. With funds in hand, investors will be in a dominant position, and when the market stabilizes and rebounds after a certain distance, they can take a series of measures to turn losses into profits in advance.

3. The decline in the major wave band's top is between 25% and 30%

The trend of a major wave band is a cyclical pattern of decline-rebound-decline-rebound-decline. In such a cycle, investors can repeatedly adjust their positions and sell high and buy low, which not only reduces losses but also preserves their chips. This measure should continue until the trading volume shrinks and the market enters a horizontal consolidation, reaching the bottom area, and then it can be gradually absorbed.

4. Although various types of sectors have experienced a rotation of increases, the index has not set a new high;5. After the index continued to surge, it did not stabilize with increased volume, and even attempted to break through the high point several times, but failed. The stock index showed an M head or a triple head at high levels, and the market showed a situation of increasing volume with stagnant prices or decreasing volume with rising prices.

II. Three Stars Falling Gap Down

The Three Stars Falling Gap Down consists of four K-line combinations. First, a medium or large bearish line is closed due to inertia, followed by three small bearish lines that open lower and are arranged side by side to the right of the large bearish line. There is a complete gap between the three small bearish lines and the first long bearish line (in all stock market books, it is only called Three Stars Falling Gap Down when the three small K-lines to the right of the large bearish line are completely bearish). However, in the actual stock market trend, after a large bearish line, the parallel small K-lines that appear to the right often include very small bullish lines or doji lines, so today's Three Stars Falling Gap Down K-line combination is discussed.

Let's look at a few more technical patterns:

1. Doji: A doji appears in the high price circle (the opening and closing price is the same line), leaving both upper and lower shadows, with the upper shadow being longer. This situation indicates that the stock price has risen quite high after a period of time, is unable to continue rising, and is about to decline, which is a clear selling signal.

2. Covering Line: After the market has risen for several consecutive days, it opens higher the next day, but buyers are unwilling to chase high, and the overall trend continues to slide, with the closing price falling within the previous day's bullish line. This is the selling pressure that emerges after being overbought, due to a large number of profit-taking positions being thrown out, and it will fall.

3. Pregnant Line (a small bullish line is contained within a longer bullish line) After rising for several consecutive days, a small bullish line appears the next day and is completely contained within the previous day's large bullish line, indicating a lack of upward momentum and a precursor to a sharp decline.4. Engulfing Pattern (Bearish Line Enclosed Within a Longer Bullish Line): After several days of sharp increases, the opening and closing prices of the current day are completely enclosed within the large bullish line of the previous day, and a bearish line appears. This also indicates insufficient upward momentum and is a precursor to a decline. If another line with an upper shadow is drawn the next day, it can be judged as a sign of a sharp market crash.

5. Hanging Man Bullish Line: It opens at a high level, and the previous buying orders are sold out for profit-taking, causing the overall trend to slide down. At the lower level, there is a strong support, and the price climbs again, forming a lower shadow line that is more than three times the actual line. This pattern seems to indicate that the buying orders have become stronger, but it is necessary to be cautious about the main force pulling up and selling out. Those who are empty-handed should not rush in, and those who hold positions should sell at a high price.

Three signs:

1. Sell on the Head and Shoulders Top Breakthrough Line

The Head and Shoulders Top Breakthrough Line is composed of two K lines. The first K line is a bullish line with a larger body, and the opening price of the second K line exceeds the highest price of the first, but it closes near the lowest price of the day, and the closing price is obviously below half of the body of the first K line, as shown in the figure.

The Head and Shoulders Top Breakthrough Line is a top reversal signal. The large bullish line formed in the upward trend shows the strong power of the buyers. However, the next day, the sellers launched a fierce counterattack and closed at a relatively low position, especially when the closing price cut into half of the body of the large bullish line, indicating that the sellers have accumulated a considerable amount of strength, indicating that the stock price will fall or rebound in the future.The following is the English translation of the provided text:

**Practical Chart Analysis**

As shown in Figure 1-2, this is the daily K-line chart of Xining Special Steel. The stock began to reverse its trend from a previous low of 1.25 yuan, and after a rapid short-term increase, it formed a "Dark Cloud Cover" K-line pattern within the boxed area of the chart. The first day was a large bullish candle, and the second day the stock opened higher but was suppressed by selling pressure, causing the price to fall all the way, forming a candle with a body that cuts into more than half of the previous large bullish candle's body by the closing time. The trading volume on that day significantly increased, indicating signs of the main force quickly lifting the price and then selling out. The signal of a price peak is quite obvious, and investors should be alert. The next day, a small bearish candle with a lower center of gravity was formed, further confirming that the stock price has started to reverse. At this point, one should sell out completely and not hesitate.

When using the "Head Piercing Line" for selling, investors should pay attention to the following points:

1. If the second bearish candle can show an increase in trading volume, the possibility of the stock price pulling back or reversing later will be much higher.

2. The higher the opening price of the second day in the "Head Piercing Line" compared to the closing price of the first day, and the more the closing price penetrates into the body of the bearish candle, the stronger the force of the reversal.

3. After the "Head Piercing Line" appears, once the stock price shows a downward shift in the center of gravity and breaks through the opening price of the first bearish candle, it is a decisive signal to sell.

**Head and Shoulders Pattern Selling**

The "Head and Shoulders" pattern is composed of two K-lines. The first K-line closes with a large or medium bullish candle at a high position, and the second day the stock opens significantly lower, with its K-line body completely contained within the large or medium bullish candle of the previous day (the upper and lower shadows can be excluded), as shown in the figure.In the midst of an upward trend in stock prices, the appearance of a bearish engulfing pattern signals that the upward momentum of the bulls has begun to wane, the strength of the stock price increase starts to weaken, or the upward trend experiences a temporary pause, indicating that the direction of the stock price is about to change.

Practical Chart Analysis

As shown in Figure 2-2, it is the daily K-line chart of Huayi Compressor. The stock started to rise from the previous low of 7.31 yuan, and a bearish engulfing pattern was formed within the boxed area in the chart. The first day was a large bullish candle with upper and lower shadows, also setting the highest price of this wave at 14.35 yuan. The second day, the stock opened lower, and under the pressure of selling orders throughout the day, the stock price fell, forming a small bearish candle with upper and lower shadows at the closing, which was completely covered by the body and lower shadow of the previous large bullish candle. Since the bearish engulfing pattern appeared after the stock price had risen by 96%, it indicates that the upward momentum of the stock price is insufficient and may fall. Although it may not fall immediately, investors should prioritize the safety of their funds. As long as the stock price opens and moves lower the next day, or opens flat and moves lower, they should consider selling and exiting.

When using the bearish engulfing pattern to sell, investors should pay attention to the following points:

(1) The most ideal volume change for the bearish engulfing pattern is that the trading volume of the previous trading day is significantly increased, and then the trading volume of the following trading day rapidly shrinks. Moreover, if the market continues to adjust, the volume also decreases, indicating a higher possibility of a reversal in the market trend.

(2) The greater the contrast between the lengths of the bodies of the two K-lines before and after the bearish engulfing pattern, the more significant it is for analysis.

(3) After the bearish engulfing pattern appears at a position where the stock price has risen significantly, from the perspective of risk aversion, investors should reduce their positions. If the center of gravity of the stock price is still falling, they should resolutely sell and exit.

Three, Heavy Rain Selling

Heavy Rain is composed of two K-lines. The first K-line is a large bullish or medium bullish candle with a large body, and the second K-line is a large bearish or medium bearish candle that opens and moves lower, with a closing price lower than the opening of the previous bullish candle, as shown in the figure.Heavy rain pouring is a top reversal signal. In an uptrend, after the stock price has risen continuously, the bullish energy has been completely released. When the bulls are no longer able to continue attacking, the bears fight back, and the stock price opens low and goes low, and the outlook becomes pessimistic again. The downward strength of heavy rain pouring is greater than that of the head piercing line. Investors should not continue to be bullish and do more after seeing heavy rain pouring, but should reduce their positions on the high side.

Practical Atlas

As shown in Figure 3-2, it is the daily K-line trend chart of Ziguang Gu Han. The stock rose from the previous low point of about 5.18 yuan, and formed a heavy rain pouring K-line trend in the box in the figure. The first day was a big Yang line with almost no head and feet, and the stock price touched the highest of 10.06 yuan, setting a new high since the rise. The second day, the stock price opened low and went low under the pressure of the sell order, and formed a medium Yin line with upper and lower shadows at the close. At this position, the appearance of the heavy rain pouring K-line combination requires investors to judge whether it is the main force's behavior of quickly raising the stock price and selling goods. If it is caused by the main force's wash, then the stock price will break through the previous high after stabilizing and rising in the future. However, in the following trend, the center of gravity of the stock price is continuously moving down, so we can determine that this is a signal of the stock price reaching the top. At this time, investors should decisively sell all their stocks and leave.

When investors use heavy rain pouring to sell, they should pay attention to the following points:

(1) If the trading volume of heavy rain pouring increases sharply, even releasing the highest volume in recent times, then the main force's desire to leave at a high position is strong, and the decline will be more fierce. Moreover, the more the Yang line entity is higher than the Yin line entity, the stronger the signal of the reversal.

(2) If heavy rain pouring appears at a high position, from the perspective of avoiding risks, investors should still reduce their positions. If the center of gravity of the stock price is still moving down, they should resolutely sell and leave.

Finally, for retail investors in the delivery phase, they should grasp the following operational strategies:

(1) Know when to stop. Use the calculation method to estimate the target position that the dealer may raise, and when it is close to the target position (±10%), combine the changes on the plate. Once the signs of the dealer's chips loosening are found, they should resolutely leave and never look back, no matter how much they can rise in the future, and do not be greedy for the battle. In the end, keep a victory fruit and maintain a normal heart.(2) Gradual Position Reduction. When the stock being followed by the investor has already had a significant increase, a correction may occur at any time. Investors can make a plan to sell in batches. For example, sell a certain number of shares for each price increase; once there is a sudden change in the market, sell all positions immediately.

(3) Set a Profit Target. Just as some short-term traders set a stop-loss point, medium-term investors who follow the market can help us hold our positions to the end by setting a profit target after the market maker has raised and we have already made a profit. The limit of the market maker's washout is generally the cost area, and the first target of the rise is to leave the cost area by 30% to 50%. We can set the first profit target 20% above its cost area. In the future, as the stock price rises, the position of the profit target can be continuously adjusted, such as the lower rail of the rising channel, the 30-day moving average, or according to the personality of the stock to grasp flexibly.

(4) Technology First. After the stock price has risen continuously, it forms a single-day reversal, leading to a continuous decline. This pattern is relatively easy to identify. When a stock rises continuously with a 45-degree slope and the increase exceeds 30% or 50%, it should be considered that it may form a reversal.

After the stock price has risen significantly in the main wave, it has been in a horizontal consolidation at a high position for a month. In this process, the stock price repeatedly hits the highest price, but all efforts are in vain, and each time the trading volume decreases. When the 30-day moving average becomes flat and gradually forms a downward trend, the stock price breaks down and begins to fall sharply. In technical analysis, it is called the "box top or round top" pattern. This type of stock is mainly a stock controlled by a super-strong market maker, a stock with a relatively small circulation plate, or it appears in some high-priced stocks.