Stock swap is an active strategy for resolving conflicts, and when used properly, it can effectively reduce costs and increase opportunities for resolving conflicts. But stock swap is also a risky way to get out of the trap. Once the operation is wrong, it will result in losing both the wife and the soldiers. So, investors need to be very cautious when exchanging stocks, and in practical applications, they need to master the rules of stock exchange.
1、 Keep the small and exchange for the big. Due to low restructuring costs, small cap stocks are easily selected by more market makers to control the market, resulting in a more active nature of small cap stocks and often stronger trends than the overall market. So, small cap stocks are the preferred variety for outperforming the trend and exchanging for stagnant stocks in hand.
2、 Keep low and switch high. Low priced stocks are easily overlooked by the market, and their investment value is often underestimated. Due to their lower absolute prices, low-priced stocks have limited room for further decline and lower risks. If it is a low-priced stock that has fallen deeply from a high position, it has a certain upward potential because it is far away from the concentrated upper bound area. The price of high priced stocks themselves implies high risk, leading to significant adjustment pressure on high priced stocks. So, when exchanging stocks, it is necessary to exchange for high priced stocks and keep low-priced stocks.
3、 Replace old with new. New and secondary stocks, due to their lack of expansion, generally have small circulating stocks and are easily controlled by the main players. Newly listed stocks that have not been wildly speculated on for a long time have a relatively light upper tier lock up, and with the recent listing of new stocks that raised a large amount of cash, new profit growth points often emerge. These factors can easily ignite the hype enthusiasm of mainstream funds.
4、 Replace the strong with the weak. The characteristic of weak stocks is that if the market declines, weak stocks will fall with the market, and the decline often exceeds that of the market; If the market rebounds, even if weak stocks follow the market rebound, their strength will be weaker than the market. So, once investors discover that they hold weak stocks, whether they are trapped or profitable, they should clear their positions in a timely manner and choose strong stocks. This is the only way to effectively ensure the utilization rate of funds.
5、 Leave behind stocks with ownership and exchange for stocks without ownership. Youzhuang stocks refer to stocks in which the main force intervenes. With strong funds, the main force often ignores the rise and fall of the market, constantly pushing up the stock price, and the stock price shows a trend of the strong always being strong. Due to the lack of support from main capital, most of the non stock market is supported by small retail investors. If you hold these stocks, you can only work hard with other retail investors.
6、 Leave the new shares and exchange for the old shares. Because regardless of whether there has been a huge rise in the past, whether there is time and space for profit, as long as under the long-term pressure of time and cost, old and new stocks often consider how to escape, so the upward space and strength of old and new stocks are questionable. The Xinzhuang stock index refers to individual stocks whose main intervention time has not exceeded one year. As new funds have just entered, their explosive power often exceeds that of old Zhuang stocks.
7、 Leave the bottom volume stocks and exchange for the bottom volume stocks. To switch to stocks that can rise and rise quickly, stocks with high volume at the bottom often have a weaker overall trend when following the fluctuations of the market. Even if they are selected by market makers in the future, the main force will buy them down to attract funds before building temporary positions. If the market maker's stock is not trading at the bottom, it can only indicate that the main force has already absorbed a lot of money and is thinking about how to distribute it, and the future upward space can be imagined. So, when switching stocks, it is important to pay attention to bottom volume stocks as much as possible.
8、 Leave mainstream sector stocks and trade out unpopular stocks. Some obscure stocks only fluctuate around a few cents a day and have few transactions throughout the day. If you have such stocks in your hands, you should sell them early and switch to mainstream stocks that have not yet seen significant gains.
9、 Leave stocks with potential themes and exchange them for stocks with clear themes. There are often vague themes rumored in the market, and whether they are true or not is not important. As long as they can be recognized by the investing public, stock prices often have a pleasing performance. But once the theme becomes clear, the hype will come to an end. So, when switching stocks, it is important to choose stocks with potential obscure themes, rather than stocks that have already been cashed in with positive news.
