Many friends encounter this issue when trading. We can break down this problem and address it one by one, so as to thoroughly discuss the matter.

Firstly: After a significant rise, there is a tendency to want to go short, which is a cognitive inertia towards market trends. The patterns of past market movements are strikingly similar, with oscillating markets often experiencing periods of rise followed by fall. In trending markets, prices also tend to rise after retracements or fall after retracements.

All these patterns resemble an electrocardiogram, with highs and lows, transitioning up and down, and the characteristics are quite evident. As a result, traders tend to believe that after a significant rise, the market is bound to fall a bit, and after a significant fall, it must rise, leading to the idea of bottom-fishing and top-guessing. When the market falls, they feel it will rise, and when it rises, they feel it will turn to fall. Psychologically, this inertial thinking has already formed.

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If we replace the candlesticks in the candlestick chart with line charts, the changes in price trends will look very much like the electrocardiograms we usually see, with highs and lows, alternating up and down, very evident.

With this inertial thinking, it is natural to want to go short after a significant rise in the market, and this idea is quite normal.

Secondly: Is it always wrong to think of going short after a significant rise, and will it definitely result in a loss?

Not necessarily.

As long as the method is appropriate, going short after a market rise can also be a very good trading logic.

For example, after a market rise, when it tests an important resistance level, there is a possibility of a reversal. Taking short positions at these significant resistance levels, if the market does reverse, the orders can be placed at the turning point of the market trend, with a very small stop-loss space and a large profit space, making it an excellent trading opportunity with a favorable risk-reward ratio.This is a trading logic with a bias towards oscillation.

After a significant rise in the market, it tests the pressure at the previous high of 9072. After being affected by the pressure, the market forms a reversal candlestick, indicating an expectation to reverse and move downward. At this point, short positions can be entered, with the stop loss set above the previous high pressure level. Subsequently, the market experiences a substantial decline.

The stop loss space is over 60 points, while the market has dropped nearly 800 points, making the risk-reward ratio very reasonable.

Therefore, shorting after a significant rise is not necessarily wrong, nor does it inevitably lead to losses. The core still lies in whether a complete trading system can be formed to take reversal trades when the market tests key levels.

I have previously written articles explaining how to use important support and resistance levels for trading. You can check them out on my public account (Eight-Digit Garden).

Thirdly: How can one continue to go long after a rise?

If you want to continue to go long after a rise, you should establish a trading system that continues to go long after an increase.

Continuing to go long after a rise belongs to a trend-following trading logic. To place orders to go long after a rise, one must first establish this trading logic. The segment of the market we are targeting is the second rise after the initial increase, and that's the profit we are after, with a clear goal. The profit from the market's pullback after a rise has nothing to do with us; after the market rises and establishes a bullish stance, we only go long and do not go short.

After clarifying the goal and logic, a trading system for continuing to go long after a rise is built based on this logic.

Typically, there are two patterns for continuing to go long after establishing a bullish stance: one is the pullback long pattern, and the other is the breakout long pattern. The two red circles represent the two long patterns.Enter the market on a break above, after the market has established a bullish trend through an upward movement, and after a deep correction, re-enter long positions by breaking above the previous high.

Enter on a pullback below, after the market has established a bullish trend through an upward movement, enter at the end of the pullback, which can be combined with reversal patterns in candlestick charts for operation.

Both methods belong to a trading system that continues to go long after the upward trend has been established, and both are viable. Of course, there are many more details to a trading system, and this is just a simple example; do not rush to apply it directly to live trading.