After a round of price rise, a peak is formed, and then it starts to fall. This decline has gone through 3 falls and 2 adjustments according to wave theory. Generally, when encountering such a market with 3 falls, one would not blindly go short, but rather observe whether the market can stabilize first and then look for opportunities to go long. Typically, after such a 5-wave decline, the market will take a break, either continue to fall, or first build a bottom and then start to rebound, or even experience a reversal.

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