Although the A-share market has been generally lackluster over the past few months, speculative stocks have been rampantly soaring.

The winds of speculation are blowing strongly, completely skewing the market's direction.

Many people are speculating when this wind of speculation will stop.

But unfortunately, it is difficult to see the wind of speculation stopping in the short term.

There are many reasons behind this situation.

Firstly, regulatory oversight has been lax, and a permissive attitude is prevalent.

In the past, if a stock price soared, the exchange would send a letter asking for the reason.

If the stock price continued to hit the upper limit, measures such as temporary suspension would be taken.

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But now, it seems that the speculation of speculative stocks is ignored and no one cares, and there has been no situation of suspension for inspection.

This indicates that from the perspective of regulatory attitude, there is no special control over the speculation of speculative stocks.Or rather, the speculation of "demon stocks" is part of the market's activity and should not be prohibited.

Anyway, all retail investors who buy demon stocks understand that this is a gamble, and they won't curse or complain if they lose; they accept the consequences.

Secondly, with no hot spots, capital is seeking an outlet.

The market lacks any sustainable hot spots, yet capital needs to generate returns.

Therefore, capital recklessly chases after hot spots, speculating on demon stocks.

Originally, it might have been related to a theme, but later on, it directly speculates on the stock's name.

This is a typical case of finding an excuse to speculate on you, without needing too many reasons.

This unhealthy trend stems from capital not finding an outlet and believing that the market environment allows it to create a trend.

After all, demon stocks themselves are a theme, which is why there is a trend of speculating on them.

Thirdly, value investing is all about being trapped in positions.Capital is now hesitant to enter those so-called value investment stocks because they are all trapped positions.

Capital is driven by the profit effect, not by the intention to act as a liberating army.

Naturally, capital is unwilling to enter stocks that are all trapped positions.

Because, as the price rises, there is a hurdle at every step, and there are people selling their chips at every step.

It can be said that buying those stocks may be a bottomless pit, which is hard work and not appreciated.

Moreover, many value investment stocks are occupied by some institutional funds waiting to sell and adjust their positions, hoping to find someone to take over.

The smartest hot money will never touch these stocks, they all take a detour, and as a result, they have started to speculate on "demon stocks."

Fourth, in the game of existing stock, the opponent is retail investors.

There is another reason for speculating on demon stocks, which is that it is easy to make money because the opponents are all retail investors.

Demon stocks are usually not bought by the main force, that is, the regular army does not look down upon them at all.Speculative stocks often have a relatively small market capitalization, typically only a few hundred million in circulating shares, making it difficult for large capital to enter.

Moreover, the performance of speculative stocks is generally not very good, and the prices are relatively low, attracting a larger number of retail investors.

The difficulty of institutional competition is high, but when it comes to the game between the main force and retail investors, the chances of winning are much higher.

When the opponent is retail investors, the main force that decides the fate naturally occupies the initiative, and the "mowing of leeks" (a metaphor for taking advantage of inexperienced investors) happens one wave after another.

Fifth, the money-making effect, the game of hot potato.

Finally, the market lacks a money-making effect, but speculative stocks have it.

Only by turning stocks into speculative ones can capital make money; otherwise, following the trend of the bear market, it is impossible to make money.

The game of hot potato seems complicated, but in reality, it is not difficult.

Speculative stocks ultimately see a huge volume at their peak, followed by a collective exodus of funds.

Nine out of ten times, the selling goes smoothly, and there are very few cases where the stocks cannot be sold.This is due to the greed of retail investors, and they are easily tempted, making it a routine to take over positions.

When the profit effect can be guaranteed, capital is naturally willing to set up a game to lure retail investors into the market.

Anyway, there are enough "leeks" (a slang term for inexperienced investors), after cutting one batch, there is another batch.

The market style will not remain unchanged, but at least for now, even if the "demon stocks" (a term for stocks with abnormal price movements) crash in the short term, it will not change, but instead, a new batch of demon stocks will be reborn.

Because capital is very smart, they do not believe in any value, they only believe in the money that can be put in their pockets.

The result of the frenzied speculation of demon stocks is actually only one.

That is, a large number of retail investors are ultimately trapped on the mountain top.

Many people may be curious about how these speculative funds withdraw.

In fact, this is due to the characteristics of retail investor transactions behind the scenes.Firstly, the belated awareness of retail investors.

When it comes to trading, retail investors are inherently late to the party.

For the main forces, speculating on a "demon stock" may start from the first day it hits the upper limit of the price rise.

For retail investors, identifying which stock is a "demon stock" might only become clear after three or five consecutive days of price limits.

Retail investors are naturally a step behind, as they need to wait until the stock shows signs of becoming a "demon" before they can make a judgment and consider whether they want to enter the market.

Without the advantage of being the first to act, retail investors' holding costs will naturally be higher, and thus the risk is naturally greater compared to the potential returns.

Secondly, the characteristics of the T+1 system.

The T+1 system is a poison for retail investors and a secret weapon for the main forces to offload their positions.

Most of the offloading techniques for "demon stocks" involve pushing up the price in the morning and then crashing the market in the afternoon.

Due to the T+1 rule, retail investors who follow the trend in the morning can only helplessly watch.Many even experience a "sky floor" phenomenon, where the loss on the same day can exceed 20%.

However, the main force, because they have a bottom position, can use the trading rules to make T+0 transactions, at least to clear the chips clean on the same day, leaving at most a part of the position bought on the same day.

Under this trading system, once the main force finds enough followers during the lifting process, allowing him to ship out, then smashing the plate becomes inevitable.

Therefore, the success rate of leaving at a high position is very high, and the probability of retail investors being trapped is also very large.

Third, the characteristic of chasing the rise and killing the fall.

Retail investors are born to chase the rise and kill the fall, which also helps to increase the momentum of the demon stock.

Some demon stocks will start a new round of rising after two consecutive limit-downs.

That is because the retail investors who chase the rise have killed the fall and handed over the chips again.

The main force can use the emotions of the retail investors to turn the chips back and forth, and give when the retail investors want, and pick up when the retail investors throw them out.

This method can easily complete the washing plate, and still maintain a good profit margin during the washing plate process.Fourth, the essence of blindly following the trend.

Retail investors have a keen interest in blindly following trends, which is also the main reason why speculative stocks can withdraw smoothly.

In theory, as the price rises, the funds following the trend should decrease.

But in reality, there are still many retail investors who blindly follow the trend without fear of high prices.

The profit effect of speculative stocks will spread, and many retail investors who have already bought will spread it to the people around them.

The main force is almost not afraid of a lack of followers, because there is always someone who wants to try.

Fifth, the lack of a trading system.

The last reason is the essence.

Retail investors do not have their own trading system, which is why they blindly participate in speculative stocks.

Anyone with a trading system, even if they speculate in speculative stocks, will not easily fall.For, the speculation on "demon stocks" also follows certain patterns and disciplines.

The speculation on demon stocks is also supported by technical theories, which at least can ensure a 50-50 chance of winning or losing, and not ending up with more losses than gains.

The trading system is the foundation for retail investors to achieve stable profits.

When the trading system is missing, problems arise, and the timing for short-term buying and selling is also missing.

This is the essence that directly leads to retail investors being easily trapped at the peak when speculating on demon stocks.

In terms of trading itself, demon stocks only seem lively, but in the end, they all end up in a mess, and it is the retail investors who pay the bill.

Therefore, I advise ordinary retail investors to gamble for fun, and do not fall into the strange circle that investing must buy demon stocks.

Otherwise, you are destined to be defeated in the demon stocks, otherwise, how do the main funds make money?