Let's first look at the seven experiences for short-term buying and selling:
Experience 1: Every sector has its own leader; when you see the leader moving, immediately look at the second and subsequent valleys.
Experience 2: Pay close attention to trading volume. Buy in steps when trading volume is low; sell all when trading volume is high and expanding.
Experience 3: Buy when there is a pullback with decreasing volume, sell when there is a pullback with increasing volume. Generally speaking, an increase in pullback volume indicates that the main force is unloading.
Experience 4: Buy when RSI hovers at a low level for three times, sell when it hovers at a high level for three times. Buy when RSI is less than 10, sell when RSI is greater than 85. If the stock price hits a new high but RSI does not, it must be sold. Meanwhile, KDJ can be used as a reference. In short-term trading, the W%R indicator is very important and must be taken seriously; in long-term trading, the TRIX indicator should be closely monitored.
Experience 5: There is no need to distinguish between high-performing stocks and low-performing stocks in your mind. In the valley, there are only strong stocks and weak stocks, only strong operators and weak operators.
Experience 6: Buy when the moving averages cross upwards, sell when they cross downwards. Buy when both the 5-day and 10-day moving averages are upwards, and the price is above the 5-day and 10-day moving averages, as long as it does not break the 10-day moving average, do not sell. If it is confirmed to break the 10-day line, sell when the 5-day moving average turns down. Because the 10-day moving average is very important for the main players, it represents their cost base, so they generally do not let the stock price fall below this line.
Experience 7: The effect of chasing up and killing down can sometimes be significant. The strong remain strong, and the weak remain weak. For stock trading, the concept of time is very important, don't make it hard for yourself, short-term stock trading mantra:
Rule 1: Do not sell when it rises high, do not buy when it drops sharply, do not trade in sideways.
Rule 2: Buy on declines, not on rises; sell on rises, not on declines.
Rule 3: In sideways consolidation, wait a little longer. When a stock continues to rise or fall, it will definitely enter a sideways state. At this time, there is no need to sell all at high levels, nor to buy all at low levels, because after consolidation, it will definitely change direction. If it changes from high to low, clear the warehouse in time; if it changes from low to high, chase in time.
Rule 4: When it's high and sideways, then rises, seize the opportunity to quickly sell: when it's low and sideways again with a new low, it's a good time to buy in fully.
Rule 5: Plan to build positions in batches, the more it falls, the more you buy in a pyramid. This is the method of capital allocation. Once the target for buying is determined, the entry point issue must be resolved. Even the entry point that one considers the safest may create a new low. After being trapped, one should buy more as it falls at low levels according to the plan, rather than cutting losses. Building positions using the 'pyramid buying method' is the only eternal truth of value investing.
Rule 6: If one pushes and two recommend but it does not rise, one can only shake the warehouse down again.
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