The types of people who can always make money in the Chinese stock market!
1. The first type consists of professional stock enthusiasts.
Their starting capital may not be large, but they are determined to make stock investment a career, at least a temporary one.
From a psychological perspective, they belong to professional players.
This group of people, due to their full commitment to the profession of stock trading, their focus, diligence, and professionalism, often achieve financial freedom after experiencing several bull-bear transitions.
2. The second type consists of those who have their primary jobs; although they trade stocks as a hobby, they have considerable experience in the stock market.
They know to go all out when a bull market arrives, and most will transfer the money earned in the stock market out of their accounts to buy houses and cars or improve their quality of life during the peak of the bull market.
Although there are those who get trapped when the bull market ends without being able to withdraw completely, this group, when accounting, are all profitable.
Many experienced office workers who trade stocks find that their stock earnings are a beneficial supplement to their salary.
3. The third type consists of retired stock traders.
The biggest difference between them and professional stock enthusiasts is that they do not treat stock trading as a profession, but merely as a form of entertainment.
Their biggest characteristic is that when they buy stocks and the price falls, they never sell at a loss; they must hold until they make a profit.
This kind of waiting often spans several rounds of bull-bear transitions before profit can be realized (because the stocks that are trapped in this round of bull market are often not the hot spots of the next bull market and may not even be released in the second round).
Before the main text begins, let's look at two pictures:
Why do retail investors keep losing money in stock trading? After seeing the above two pictures, investors should have a bit of insight. Throughout this process, the most common mistake retail investors make is being overly obsessed with news, and the main force often capitalizes on this point.
Information Addiction
Those suffering from information addiction are interested in all messages, whether they are company rumors, government announcements, terrorist attacks, ISIS, etc., believing that all messages will somewhat affect stock prices, and indeed stock prices fluctuate daily, so it appears that they are affected. Information addiction is often irresponsibly exacerbated by the media, as their livelihood relies on selling information, so they must claim that any news has some value, as it is said that the seller of melons can only say that their melons are sweet. This is acceptable; what is most worrying is that the media intentionally distorts news to attract attention, which has become a common occurrence in modern society. Someone clearly means one thing, and the media takes it out of context, immediately transforming it into the opposite meaning. If stockholders focus on this kind of news all day long, they will be continuously manipulated and often make decisions based on certain news, only to find out later that it was false, and then the media starts to refute it.
For the media, this strategy works well, at least it attracts your attention twice, but the money you lost due to false information is not the media's responsibility to compensate. The media tends to exaggerate the mainstream erroneous sentiments in the market, such as being most pessimistic at the bottom of a bear market and most optimistic at the top of a bull market. This phenomenon has been proven throughout history.
Especially as we enter the information age, the cost of obtaining information is unbelievably low, with the vast majority of information being noise or junk. Listening to noise all day will eventually damage your ears. In fact, only one or two truly useful pieces of information are enough.
Turnover rate.
1. First, observe whether the turnover rate can be maintained for a long time
Because a long period of high turnover indicates a large amount of capital inflow and outflow, strong sustainability, and ample incremental capital, such stocks are operable.
Case Analysis:
Morning session on May 24 recommended 000573 Yuehongyuan A, which surged to its limit.
On the 17th, stock 000613 Dadonghai A was recommended. It opened high and then fell, but afterwards it rose all the way, with a 20% increase by May 24;
Today (May 25), the morning session recommended stock 603683 Jinghua New Materials, with end users having bought in advance on the 22nd, currently yielding a profit of 12%;
In the KDJ391 circle, hot news and three hot stocks are shared daily for everyone to discuss and learn together.
2. K-line positions where high turnover rates occur
Generally speaking, a high turnover rate at a high price after continuous price increases should draw the attention of shareholders, as it is likely that the main force is offloading; while a high turnover at the bottom indicates a large-scale accumulation of funds, especially when the fundamentals improve or there are favorable expectations.
3. Capital flow of high turnover rate
A high turnover rate can indicate capital inflow but may also indicate capital outflow. If the stock price closes with a bearish candlestick (a long entity is best), and indicators like DDX show significant net outflow of large orders, a high turnover rate often signifies a substantial reduction in main funds; whereas if the stock price closes with a bullish candlestick (a long entity is best) and DDX shows net inflow of large orders, a high turnover rate is often caused by unilateral buying by the main force, indicating a positive outlook.
4. Abnormal volume ratio and abnormal turnover rate
Six major principles for stock selection based on turnover rate
1. Trend is king, buy in batches
For example, in a bull market, short-sellers' tricks and brief pullbacks are the latest opportunities to build positions, buying in batches to gradually accumulate.
2. High turnover rate at low levels, the main force washes the plate
A very high turnover rate at a low level does not mean the main force is accumulating, especially when the stock price is still in a downtrend, it often indicates continued distribution.
3. Breakthrough of average turnover rate by more than twice
If a stock's turnover rate exceeds 10% on the same day during a surge (except for newly listed stocks or stocks listed in Hong Kong for a short time), it usually indicates that the main force has started to act in the market.
4. Pay attention to unreasonable pullbacks, the main force lowers prices to accumulate shares
5. Volume expansion at the bottom, high turnover rate
Stocks with volume expansion at the bottom and high turnover rates indicate a clear sign of new capital involvement, and the future upside potential is relatively large. The more fully the turnover at the bottom, the lighter the selling pressure during the upward movement.
1. High turnover rate
Indicates significant disagreement between bulls and bears, but as long as the active trading condition can be maintained, stock prices generally show an upward trend.
2. Low turnover rate
Indicates that the opinions of both bulls and bears are basically consistent, and the stock price will generally maintain its original trend for further development, and in most cases it will slightly decline or trade sideways.
3. High turnover rate at low levels
For the emergence of a high turnover rate, investors should first distinguish the relative position of the high turnover rate. If a stock shows a high turnover rate after a long period of sluggishness, and if this high turnover rate can be maintained for several trading days, it is generally seen as a clear sign of new capital's involvement. At this point, the credibility of the high turnover is relatively high, and due to the volume expansion at the bottom and sufficient turnover, the future upside potential of the stock should be relatively large, and the possibility of becoming a strong stock is also significant.
4. Extremely low or high turnover rate
In most cases, extremely low or high turnover rates are leading indicators of price changes. Generally, after a prolonged adjustment in stock prices, if the turnover rate remains at an extremely low level (such as below 2% weekly) for more than a week, it often indicates that both bulls and bears are in a wait-and-see attitude. As the short-sellers' power has mostly been released, the stock price is essentially in the bottom region, making a subsequent price increase likely.
Short-term stock selection ideas
1. This is completely different from the medium-term stock selection idea. Short-term stock selection should pay attention to the current market hotspots, sector effects, capital flows, etc. Stocks with sustained volume increases should be chosen, especially those hitting new highs. Valuation considerations may take a back seat to the above points.
With a concept, institutions can provide an inspiring grand blueprint, and with continuous capital involvement, it has the opportunity for short-term windfall profits. High risk is always accompanied by high returns. Imagine: if selling drugs didn't have high profits, who would take the risk? A few days ago, those who dared to intervene in G Jielong after three limit-ups deserve admiration for their courage!
Currently, I cannot definitively say that those who intervened at the fifth limit-up will definitely get trapped. I remember a master who, five years ago, achieved a myth of his funds doubling 12 times in a year by chasing limit-ups; I became his member for this reason. However, this myth did not continue and did not bring me excess returns, so I could not continue to pay fees to be his member. Although the performance of the stocks he operated was average, his concept of staying out of the market inspired me greatly.
Tuition fees are not paid in vain! My experience is entirely exchanged for various tuition fees (including membership fees, losses, software fees, etc.).
2. Key points for selecting short-term stocks: Please look for stocks in the top 100 daily; stocks with sector effects are even better. It is recommended to use daily lines for stock selection and operate with 60-minute lines. Identify the K-line with the highest trading volume in the last three months (designated as Day A), draw a line at the highest price of Day A (Price B), and if it breaks through Price B with volume less than that of Day A, you can pay attention. The smaller the volume, the greater the opportunity.
Observe whether it can make a low-volume pullback to price level B for support in the next three days, then you can consider taking action in batches. This is called the so-called high-suspended low-volume stock selection method, technically indicating that the main force has high control over the market. Whether to pull up or drop, the main force will decide based on the retail investors' follow-up orders.
3. Key points for operating short-term stocks: It is essential to enter and exit quickly, and stop-loss points must be set in advance. If profits are substantial, it is advisable to set profit-taking points daily to prevent rollercoaster rides, which would lead to joy for nothing. It is best to choose stocks that just start to rise after a market adjustment, especially those that experience sudden limit-ups after a long period of low volume, as they are likely to be leading stocks.
It is recommended to carefully study the K-line conditions of past leading stocks before they start, as it will provide you with insights. Additionally, it should be noted that professional stock software is more helpful for short-term stock operations.
