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The market in these last few days of the year is indeed interesting—institutional investors are gradually exiting, leaving mainly quantitative bots and tax-loss selling, which is a common pattern every December.
The key is to understand the logic behind this: when institutional investors exit, it means the market lacks targeted support from large funds, and volatility tends to be amplified. According to CoinShares data, there has been a total outflow of $3.2 billion since October, and market sentiment remains fragile. In such an environment, following trades requires extra caution.
My suggestions are:
1. If you want to follow trades, prioritize traders who can maintain stable strategies in low-liquidity environments, rather than aggressive traders chasing high returns. Markets dominated by bots tend to have strange fluctuations, and strategies that backtest well may lead to pitfalls.
2. Reduce your position size. For example, if you usually follow a trader with 20% of your funds, consider lowering it to 10-15% to leave room for stop-loss.
3. Pay attention to the year-end tax-loss selling window—which often creates short-term downward opportunities. If you are following contrarian traders, these days might be when they perform best.
This is the real situation: the less stable the market, the more important it is to choose the right trader to follow.