In general, when the price increases and the volume increases, we tend to believe that the price theory coordination is better, and the upward trend in the future will continue. Investors should continue to chase the rise or hold shares. If the trading volume fails to effectively increase when the stock price rises, it indicates that the majority of investors in the market are not very willing to chase higher prices, and the future upward trend is difficult to sustain for a long time. Investors should appropriately reduce their positions and adjust their position structure.
However, in the limit up and limit down system, if the stock price reaches the limit down, the buyer's investors generally hope to continue the significant decline the next day and buy at a lower price, so they will temporarily act as a "bystander" state. As a result, in the absence of buying orders entering the stock market, trading volume becomes very scarce, and the downward trend of the stock price continues. On the contrary, if there is an increase in trading volume due to the intervention of multiple forces above the limit down price, it indicates that there is considerable strength of funds that are beginning to actively intervene in a planned manner. Therefore, the future market may have the possibility of stabilizing and regaining vitality.
Under the limit up and limit down system, the subtle changes in the trading logic of stocks exhibit such significantly different characteristics:1) The trading volume at the limit up is small and will continue to rise; The trading volume with a limit down is small and will continue to decline.
2) The more times the limit up is opened midway, the longer it lasts, and the larger the trading volume, the greater the possibility of a market reversal and decline; Similarly, the more times the limit down is opened midway and the longer the trading volume, the greater the possibility of a market reversal and upward trend.
3) The earlier the limit up and closing time, the greater the strength of the subsequent market rise; The earlier the limit down closes, the greater the force of the subsequent market downturn.
4) The size of the buying orders that block the limit up board and the selling orders that block the limit down board indicate the strength of both buyers and sellers. The larger the quantity, the greater the probability of continuing the original trend, and the greater the subsequent rise and fall.
然And precisely because of the above-mentioned special characteristics of the limit up board system, many market makers make full use of these to confuse retail investors outside the market. In the process of practical operation, if the market maker wants to sell, they will first buy in large quantities to block the limit up board, in order to fully attract market popularity.Naturally, investors who originally intended to sell will chase after the limit up price, and at this moment, the market maker will take the opportunity to withdraw the buy order, fill in the sell order, and quickly transfer the position to individual investors. When the buying orders on the market are almost exhausted, the market makers will put up buy orders on the limit up board to further lure more and create the illusion of buying frenzy; When retail investors chase after them again, the market makers start to withdraw their buy orders and place them at the front. Such repeated operations can cause the chips to quietly sell out at a high level without realizing it, thus achieving the goal of escaping from the market.
Similarly, if the market maker wants to buy chips to increase their position, they will first block the limit down with a large number of sell orders, creating a bearish atmosphere and dampening market sentiment, prompting off exchange investors to sell their chips. After scaring off a large number of sell orders, the market maker will quietly withdraw the previously listed sell orders, allowing the later queued sell orders to come to the front, and gradually start buying.When the sell orders outside the spot are almost absorbed by themselves, the market maker will re list a large number of sell orders that have fallen by the limit down on the limit down board, repeatedly operating in this way to further increase their position.
In the above situation, the huge buying and selling orders that people see are actually just fictional and far from sufficient as a basis for us to judge the future market development. In practical operations, in order to avoid the above phenomenon misleading us and resulting in erroneous behavior, we must closely monitor the subtle changes in the buy and sell orders that block the limit up and limit down. At the same time, it is also necessary to determine whether there is a frequent phenomenon of hanging and changing orders, whether the limit up and limit down are frequently opened, as well as the subtle changes between each transaction and the increase or decrease in daily trading volume. Therefore, make the correct judgment and adjust your specific operations accordingly.
Under the limit up and limit down system, due to the sudden appearance of major positive and negative news, the stock price fluctuates rapidly without accompanying trading volume. Therefore, the result is that when the stock falls, investors are trapped at high levels, and the extent of the trap is generally deep; When prices rise, shareholders generally profit, and the degree of profit is usually relatively large. Therefore, investors who go short also have a sense of regret. Therefore, once several consecutive limit downs occur, the following situations may arise:
1) Shareholders, trapped by high stakes, hold onto a mentality of 'a dead pig is not afraid of boiling water'. Already suffering serious losses, I will not sell my stocks even if they continue to decline; Even if there is a slight rebound, I am not willing to withdraw from the fund. After all, I have already lost money, so the selling pressure in the market has become very light. With a little positive news, it is easy to see a strong rebound with a limit up.
2) It is precisely because a large number of chips are trapped at high levels that they become a strong resistance level for the rebound market in the future when the price starts to plummet. It is very difficult for the market to cross this level when it rises, unless there is significant positive news to support it, it will inevitably experience a decline or sideways consolidation, which will take a lot of time.
3) In general, the more severely the stock price falls, the greater the resistance it will encounter when it rebounds in the future, and the less likely it is to surpass the past level.
Similarly, once there are several consecutive limit up boards, the following situations may occur:1) If the market cooperates and the sentiment is boiling, off exchange investors are generally influenced by this atmosphere effect and have a higher desire to make profits. Therefore, the higher the stock price, the less likely it is to sell, thus forming a situation of unlimited short rise
2) Once there are unfavorable factors in the market, due to the high profitability of the stocks held by investors in the market, they have a strong downward drive and are prone to a limit down.
3) Generally speaking, when the stock price falls back to the starting point of an upward trend, it is not an easy support level to break. Some early investors, under normal circumstances, also enter the market to buy the bottom, which promotes the stock price to rebound.
From this, it can be seen that in general, a small trading volume at the limit up board means that the original trend of the market will continue to develop; Once the trading volume increases, the original trend of the market is about to reverse. However, the magnitude of stock trading volume varies due to the uneven size of stock circulation. Therefore, in practical application, we generally use the analysis method of judging "huge volume", and often determine its effectiveness and strength based on the turnover rate of a certain stock.
