A continuously rising market may seem prosperous, but calm traders have already noticed the warning signs. The pressure on the upper band of the Bollinger Bands, the dulling of technical indicators, and the stagnation of small-cap stocks in the market—these three signals together tell us one fact: the market has entered a typical overbought zone.

But there's a common pitfall that's easy to overlook: a strong index does not mean all individual stocks are rising. Today's market example—3,414 stocks are falling, and only 92 stocks hit the daily limit-up. What does this huge disparity imply? It indicates that institutions are selectively raising prices, while retail investors are blindly following.

Here are three practical tips for traders. First, for targets that have gained more than 30% in the short term, execute phased profit-taking—don't dream of waiting for them to skyrocket. It's normal not to sell at the highest point; the key is to prevent profits from turning into losses. Second, high-quality stocks that have been wrongly sold off are worth holding onto, as a pullback in the index could present an excellent low-entry opportunity. Third, always strictly adhere to your stop-loss levels—set between 5% and 8%—to keep discipline and prevent emotional impulsiveness.

The lessons of history are in front of us. After experiencing a deep decline in 2024, the market still shows strong resilience, indicating that the current adjustment is just a normal reshuffling process and a sign of market self-purification.

Finally, the old but essential advice: the essence of trading is not chasing the index, but managing your positions well. Whether your predictions are right or wrong is secondary; staying alive is the top priority.