Bull and bear markets are familiar to everyone, but recently the market has introduced a new term—the monkey market. A monkey market refers to price action that jumps up and down like a monkey, where investors who aren't careful can face drawdowns or even get trapped in losses.

The main reason for this bizarre market condition is that whales are taking profits, but institutional investors aren't responding quickly to this distribution. They're waiting for lower entry points to make their moves, resulting in insufficient buying pressure in the market. The consequence is that price volatility becomes unpredictable, with the market oscillating irregularly. Overall, the market is still in a bull trend, but the rhythm has become chaotic.

Compared to pure bull or bear markets, the difficulty with monkey markets lies in directional judgment. With bull or bear markets, as long as you get the direction right and trade with the trend, there are usually no major issues. However, monkey markets frequently create false breakouts, shaking you out of your positions multiple times in a short period and ultimately leaving you with losses. This type of market action is a severe test of a trader's psychology and the execution of stop losses, with significantly elevated operational difficulty.