Stock swap is an active strategy for resolving conflicts, and when used properly, it can effectively reduce costs and increase opportunities for resolving conflicts. Once operational errors occur, investors can also fall into the dilemma of being slapped on both sides, so they need to be very cautious when switching stocks. So, what are the specific methods for stock swap and what principles should be followed?
Stock exchange method
1、 Replace 'strong' with 'weak'. The main capital operation of a stock can be roughly divided into several stages, such as attracting funds, washing funds, raising funds, selling, and exiting. When a stock has completed the main upward wave and the main force has basically sold out, its upward momentum will dissipate. Even if it is in a sideways position at a high level, it is only at the end of its strong momentum, and the upward space is relatively small. At this point, investors may choose relatively "weak" stocks that are currently in the main fundraising period.
2、 Replace 'weak' with 'weak'. It is to exchange the weak stocks that have been completely abandoned by the main force for the weak stocks that new main force funds have entered. Because the former is like a free fall in a weak market, with an unpredictable bottom, even if the market strengthens, the rebound is often weak and there will be no outstanding performance in the entire market. The latter, due to the entry of new main funds, although its performance is currently average, will eventually see a bottoming out and a strengthening trend.
3、 Replace 'strong' with 'strong'. Some stocks, after a rapid rise, are about to or have already entered a high-level consolidation, while others may only rely on inertia to rise. However, investors' enthusiasm for chasing the rise is clearly not high, and there are signs of volume stagnation in the market. At this point, investors should promptly replace it with stocks that have just started and are about to enter a period of rapid growth.
follow a principle
1、 The principle of prioritizing quantity. Leave a stock with high volume at the bottom and replace it with a stock without volume at the bottom. Because stocks with no volume at the bottom generally have a weaker trend than the overall market, even if they are selected by the main force in the future, they will be pushed down by the main force before building positions to attract more funds. Even if the main force has already entered the stock, if there is no increase in volume at the bottom, it means that the main force has already absorbed enough chips and is likely to distribute them during the rebound, and the future upward space will not be large.
2、 The principle of active stock ownership. Some stocks have low trading volume and turnover rate throughout the day, fluctuating only around a few cents a day. These are typical niche stocks. If investors have such stocks in their hands, they should sell them early and exchange them for stocks that are currently in the mainstream sector, have active trading, high market attention, but have not yet seen significant gains.
3、 Abandoning the principle of "old" and retaining the principle of "new". Recently, due to the continuous sharp decline in the stock market, some new stocks have not paid much premium or even approached their issue price, making their valuations reasonable. But these new and sub new stocks have not been expanded, and the circulation is relatively small, making it more likely for the main funds to control the market. So, some newly listed stocks that have not been wildly speculated on for a long time are easily trapped in the market, which can easily stimulate the enthusiasm of mainstream funds for speculation.
4、 The principle of exchanging "low" for "high". There are several advantages of low-priced stocks. Firstly, they are easily overlooked by the market, and their investment value is often underestimated by the market; Secondly, low-priced stocks have relatively limited room for further decline due to their low absolute prices, especially in the A-share market. Due to the lack of exit mechanisms, very few listed companies go bankrupt, so the risk of low-priced stocks is relatively low. If it is a low-priced stock that has fallen deeply from a high position, it is far away from the concentrated area of upper traps and has a certain potential for upward movement. The price of high priced stocks themselves implies high risk and faces significant adjustment pressure. Therefore, when converting stocks, it is necessary to exchange for high priced stocks and retain low-priced stocks.
precautions
When investors switch stocks, they should keep in mind the following points:
1、 In weak markets, the duration of hotspots is generally not very long, so do not blindly pursue hotspots, and be sure to analyze market fluctuations.
2、 Be cautious of resistance stocks during market adjustments, as resistance stocks in weak adjustments are likely to be abandoned by main funds when the market strengthens.
3、 Don't chase after high stock swaps, because in a weak market, you don't have to worry about not having good buying points. You need to learn to wait for short positions.
4、 When converting stocks, it is important to consider individual stocks with high growth, small cap, low price, second tier, strong capital expansion ability, and diverse themes.
When a market trend unfolds, we need to learn to capitalize on it. To fully capitalize on the market and maximize investment returns, on the one hand, one must learn to hold stocks and reduce operations; On the other hand, it is necessary to grasp the rhythm and learn to adjust positions and exchange stocks.
Mainly holding stocks, it's not about holding onto them tightly. It's also about replacing stocks with newly launched hot spot stocks that have already shown adjustment signals due to excessive gains based on specific trends, in order to avoid the risk of short-term stock adjustments and obtain new stable returns.
For mid to long term bull stocks, not caring about short-term fluctuations and holding on until the peak is reached is an effective strategy. But in order to maximize returns and increase capital utilization efficiency, necessary band operations also need to be carried out. For short-term varieties, the ability to grasp the rhythm is a key factor determining the success or failure of the operation. Taking recent practical experience as an example, when others are taking advantage of the big bottom, you cut your meat because you are too bearish; Others suck low, but you cash out; Others are preparing to ship, but you are chasing after the price increase. This kind of operation is a failure to grasp the rhythm, which not only fails to achieve ideal returns, but also results in missing out and losing money.
Adjustment and stock swap are mainly aimed at short - to medium-term varieties. By utilizing the pullback fluctuations during the upward trend, the following principles should be adhered to when conducting adjustment and stock swap:
1. Distinguish the nature of individual stocks and keep the trend unchanged. As long as the stock's upward cycle has not ended, there are no head signals, and it is not a case of excessive volume stagnation or abnormal turnover at the top, it is important to firmly hold onto the stock. On the contrary, it is necessary to consider timely stock exchange.
2. Go for stocks that have just started to increase volume due to excessively high gains. Stocks with excessively high gains carry greater accumulated risks and require stronger adjustments. To timely switch such stocks to newly launched hot topics will not only avoid the risk of short-term adjustment, but also gain new returns. The sectors are in rotation, and no matter what strong variety, there must always be a break.
3. Replace weakness with strength. Similarly, when it comes to price increases, the speed of rise for weak and strong varieties is different, and the weaker the variety, the faster and more room for adjustment. To take advantage of the volatility, weak varieties with low trading volume and no large funds in hand should be traded in a timely manner to match the ideal strong varieties in terms of trading volume and price.
4. Go to the descending channel and switch to the ascending channel. This is simple, investors understand.
5. Go for stocks with unlimited trading volume and exchange for stocks with increased trading volume at the bottom. Quantity comes first, without quantity, it is difficult to become a bull stock.
6. Remove stocks with clear themes and exchange for stocks with potential themes. As for the restructuring theme, the day the plan is announced will be the time you switch stocks. Themes such as 5G and chip concepts are inevitable trends in the future, and there will always be opportunities for band hype for such deterministic themes.
7. Master the timing of adjusting positions and exchanging shares. To use your own trading system, grasp the points of high selling and low buying, and try to achieve high selling and low buying as much as possible.
The stock swap must not be blind, and you should wait until you have a clear understanding before taking action. Therefore, the stock pool should be updated in a timely manner to maintain the optimization of the best strong varieties, which is the prerequisite for whether you can successfully adjust your position for stock swap.
