The flow of funds is the most direct factor affecting stock prices. When a large amount of funds flow in, stock prices rise; When a large amount of funds flow out, demand decreases significantly and stock prices naturally fall. Because of this, investors must carefully consider the overall trend of capital inflows and outflows in the entire stock market when selecting stocks. They must also check whether the stocks they choose are being continuously purchased by institutions, that is, whether there are funds flowing into the stock in a planned and organized manner. Studying and analyzing the flow of funds has significant reference value for investors, especially those engaged in short-term trading, in stock selection.

So, how to determine the flow of funds in a stock? To summarize long-term practical experience, we should start from two aspects: price and trading volume. There is a necessary connection between trading volume, price, and fund operation. So how to judge the flow of funds from the changes in trading volume and the relationship between volume and price? Here are a few rules summarized:

1. After a long-term decline in stock prices, trading volume will gradually decrease to near the past bottom average. At this point, the volatility of the stock price becomes smaller and stops falling, and trading volume also shrinks to its limit. Afterwards, the trading volume gradually increased, and even showed a phenomenon of massive trading volume, indicating that there may be large funds involved in the stock. Therefore, investors should pay special attention to the trading volume.

2. During the process of stock price fluctuations, the relatively low position forms technical forms such as double bottom and round bottom. Suddenly, there is a gap in the short position one day, coupled with the effective amplification of trading volume, indicating that large funds have entered the stock.

3. After experiencing a certain decline in stock prices, if a certain stock price starts to rise moderately first, or if the overall index has already fallen by a considerable amount and a certain stock is also falling, but the turnover rate of a certain stock is relatively high (significantly higher than that of the overall market), it is possible for large funds to enter. Generally speaking, if the turnover rate is high in the low price area, it indicates that there are large funds entering the warehouse, and if the turnover rate is high in the high price area, there may be large funds flowing out.

4. Due to specific policy reasons or other reasons, there is a continuous sharp decline in stock prices. At this time, there is a large trading volume in the lower range without further decline in stock prices, indicating that there is a large amount of capital purchasing.

5. After a continuous decline of 20% to 30% in stock price, the stock has considerable investment value and forms a situation of small box consolidation. At this time, the stock price suddenly falls below the bottom of the box, and there is a large trading volume. After that, it does not fall and the stock price rises back above the original box. It is important to keep in mind whether there are large funds building positions.

6. The 5-day and 10 day trading volume averages begin to move upwards, or the 5-day and 10 day trading volume averages move horizontally. If the trading volume breaks the moving average on a certain day or for several consecutive days, it indicates that an institution is collecting chips at the bottom.

7. In the relatively low price area of a certain stock, there is usually not much trading in the market. One day, there is a sudden large-scale transaction. If a large-scale transaction occurs and the transaction price is higher than the just completed transaction price, it indicates that some institutions are willing to sell at a high price. This type of stock is worth paying attention to.

8. After a large trading volume appears, sometimes individual stocks may experience a situation where the stock price rises without the need for trading volume coordination, and the volume of price increase shrinks. This indicates that the stock has already had major players involved and is pushing up the stock price. Afterwards, if the overall market rises, the stock does not rise, and the trading volume is very low, indicating that there is no intention or inability for large funds to flow out. At this time, the fluctuation of the stock price may be a washing action by institutions. If there is a situation where a stock does not rise or even falls, and the trading volume occasionally increases, attention should be paid to large institutions selling.

9. When the stock price continues to rise for several days and there is a sharp increase in trading volume, but the stock price rises weakly, and even experiences a favorable decline, it indicates that the stock price is fluctuating significantly at a high level, and when trading volume increases, funds from large institutions are flowing out of the market.

10. After a significant increase in stock price, if there is a situation where the stock price rises but the trading volume gradually decreases, the stock price is only maintained by people's confidence, indicating that funds are withdrawing from this stock.