For retail investors, what they look forward to the most is a bull market, what they fear the most is a bear market, but what they experience the most is a volatile market.

Volatility almost accounts for more than half of the market cycle.

The market seems to be divided only into bulls and bears, but most of the time, it is actually in the ups and downs of volatility.

It looks like a bull market is coming, but it feels like the bear market hasn't left yet, which is the standard of a volatile market.

There are many opinions, which is also a prominent feature of a volatile market.

We all yearn to achieve substantial asset growth through a bull market, but in a volatile market, if you are not careful, you will take the elevator, or even lose money, which is very difficult to do.

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What determines the high or low return of an investor is not how much they earn in a bull market, nor how much they lose in a bear market, but whether there is excess return in the ups and downs of volatility.

For example, the index fluctuates around 3000 points repeatedly, but it is found that the money is gone.

The terrible thing about stock market volatility is not the ups and downs, but the fact that the funds of retail investors are getting less and less in the process of rising and falling.

What should retail investors do to deal with the potential volatile market?Amidst the ups and downs, how can one ensure their own returns instead of being harvested?

Let's share and discuss from several aspects.

Firstly, emotions must remain stable.

In volatile markets, most of the money is lost due to emotions.

This is because most retail investors tend to chase rises and sell on dips.

Retail investors often believe that what goes up is good, and what goes down is bad.

So when the market is unstable, they are eager to band together to chase the rise, buying into the part that is going up.

But every time after buying, they find that it no longer rises, and begins to fluctuate sideways, or even falls.

This is the difficult point of dealing with volatile markets.The market is always in constant flux, with hot spots moving and sectors rotating.

Emotional trading, sometimes optimistic, sometimes pessimistic, is definitely a surefire way to be a "chopstick" (a term used in Chinese stock market to describe inexperienced investors who are easily influenced by market sentiment and often end up losing money).

In terms of trading strategy, it is important to strictly enforce it, ideally by setting fixed rules for buying low and selling high. Regardless of how much profit is made, at least it will prevent losses.

Secondly, analyze the changes in the fundamentals.

The fundamentals here do not refer to macroeconomic fundamentals, but rather the financial condition and performance of the company.

In a volatile market, if you choose to hold some stocks, it is definitely a priority to study the fundamentals first.

Because technical indicators will always appear in the process of rising and falling, which is very easy to form a situation of chasing rises and killing falls.

However, the fundamentals themselves will not change with market fluctuations.

Some financial factors, including the prospects of the industry, if further analysis and research can be done, it is easy to find stocks that have been undervalued.

The outcome of a volatile market is that stocks with good performance tend to survive.During each round of decline, high-performing stocks tend to fall less, and when they rebound, their gains are usually greater.

In a bear market, a focus on fundamentals may suffer greatly due to the market trend, but in a volatile market, selecting stocks with strong fundamentals can yield good returns.

The essence of a volatile market is that capital is engaging in high selling and low buying, rather than a one-sided exit.

Thirdly, the control of position and risk.

In a volatile market, never hold the mentality of a bull market and fully load your position, as the risk is actually very high.

A position of about half is both offensive and defensive.

Moreover, a position of about half is also quite beneficial for the psychological adjustment of ordinary retail investors.

In this market environment, do not expect to make a lot of money through speculation, because the probability of losing money is also not low.

Moderate diversification of investments, coupled with setting certain stop-loss positions, can effectively reduce investment risks.

In case the volatile market evolves into a one-sided downtrend, there will be more room for adjustment to avoid significant losses.Remember especially that when adding to your position, you must be cautious, or rather, do it in batches.

The biggest problem for many investors is that they significantly increase their positions in speculation, only to be deceived by the market and ultimately lose money.

When you have a high position, you must know when to take profits, whether it's more or less, just make a profit.

Do not set expectations too high in a volatile market.

Fourth, look for changes in the market's strength and weakness.

There is a particularly key point in the volatile market, called "eliminating the weak and retaining the strong."

In the midst of market fluctuations, strong individual stocks will maintain their strength, while weak individual stocks will continue to weaken.

The differentiation between the strong and the weak is the norm, especially in a volatile market.

There is no universal rise, only the strong always remain strong, and the weak always remain weak.

Why does the index fluctuate back and forth at 3000 points, but the money in your pocket is gone?Because some sectors, some stocks have risen, while others have fallen solidly.

It seems to be a kind of hedging on the index, but the rising sectors are often less involved by retail investors.

And the falling sectors are often where retail investors gather.

Only by grasping the strength and weakness of the market and staying in the strong sectors can there be a chance to make money.

This is not about looking for stocks that go against the trend, but about finding the direction and opportunities where funds gather in the market.

Fifth, pay attention to the dynamics and development trends of the market.

The reason for the market's fluctuations is actually due to the observation of funds.

If the funds flow out unilaterally, the market is doomed to fall sharply. If they flow in unilaterally, it would have already risen.

The more entangled the market is, the more it indicates that the market is also changing.

Sometimes, funds are also waiting for the trend to become clear, waiting for the other shoe to drop, waiting for the data to be released.Macro factors indeed have a significant impact on market fluctuations, intensifying the unpredictability of market volatility.

Therefore, amidst market fluctuations, one should pay attention to the inherent changes in the market and the direction of policy guidance.

If the policy is favorable, one should buy on the way down.

If the policy is highly uncertain, it is necessary to approach the market with caution.

The long-term volatile stock market seems to be just about selling high and buying low, but in reality, it is extremely brutal.

Most retail investors lose money in the volatile market.

Including the index falling from 3700 to the range of 2800-3200, which is actually a long-term volatile market.

The direction of capital concentration is high dividend stocks, not consumption, pharmaceuticals, new energy, chips, etc.

This has led to the entire index seemingly still at 3000 points, while some sectors have been halved.The so-called "the strong always get stronger" follows the same principle.

But remember one thing: no sector can keep rising forever; even the strong have their cycles.

When the market style shifts back, some sectors will also face significant adjustments.

How they rise is how they fall.

This is a major cyclical pattern of the A-share market in the past few decades.

The better sectors are just those that fall less, while the worse ones are those that fall back to where they started.

Therefore, as ordinary retail investors, when looking at the market, it is important to maintain rationality and objectivity, and to reduce emotional trading.

If you don't have a mature trading system and can't control your emotions, then the volatile market will become a market for cutting leeks.